Last week, British insurance giant Aviva published insights into what’s happening with brokers’ businesses - and now the group has followed this up with research into how brokers feel about current hard market conditions.
The report has revealed that UK brokers generally accept that hard market conditions are likely to continue on average for 15 months. Thirty-eight per cent (38%) of brokers predict the hard market will last between 12 and 18 months, while only 4% reported that they “were not seeing the issues typically found in a hard market”.
Aviva’s Broker Barometer found that brokers have demonstrated adaptability in response to the hard market, with 88% diversifying into alternative sectors and customer groups. New customer markets include financial services (25%) real estate (22%), the public sector and transport & distribution (both 21%). Aviva noted that the move to targeting financial services customers was steered by national (32%) and regional brokers (30%), while local brokers focused on real estate, with 21% reporting a shift in focus to property.
Another key finding of the research revealed that collaboration between brokers had emerged as a core means of overcoming a lack of capacity in the market. Thirty-five per cent (35%) of brokers reported having worked with other brokers or having created networks. Forty-six per cent (46%) of regional brokers reported collaboration as a key tactic to address capacity, higher than both national brokerages (38%) and local brokers (33%).
Aviva found that brokers have also worked proactively to support clients in countering the effects of reduced market capacity through a range of efforts including early client engagement, proactive use of data and the delivery of risk management advice.
|
Broker routes to work around reduced market capacity
|
Local |
Regional |
National |
Overall |
|
Early engagement with clients |
22% |
34% |
46% |
30% |
|
Proactive use of data |
28% |
36% |
28% |
30% |
|
Deliver risk management advice |
30% |
36% |
24% |
30% |
Commenting on the findings, Gareth Hemming, Aviva’s chief distribution officer, noted that the hard market conditions visible across commercial insurance have made for a “really tough” trading environment for brokers and are likely to continue for some time.
“It is no surprise that brokers have found new ways to work around these conditions,” he said, “as they have during the past 18 months of the pandemic. Our key focus has been to work with our broker partners to support them in doing so and to remain buoyant with varied trading conditions.”
