Aviva Broker Barometer: 83% of UK brokers expect their business to grow this year

Insurer service is top issue for brokersMore face-to-face meetings is brokers’ biggest ask of insurers

Brokers are more optimistic about growth in the coming year than they have been since before 2020, according to Aviva’s latest Broker Barometer research.

Aviva’s research of more than 250 UK insurance brokers reveals that 83% expect their business to grow this year, compared with 76% last year. Just 3% of brokers believe their business will decline. When asked about their clients, 80% of brokers expect their clients’ businesses to grow, a marginal increase against last year (79%).

Organic growth features most prominently, with 39% of brokers believing this will be the source of their expansion plans. Other leading sources of growth are new customers (33%) and new service offerings (32%). M&A accounts for 26% of brokers’ growth plans.

There are differences in plans for growth, however, depending on the size of the brokerage. For example, 44% of local brokers say they will grow organically, compared with 36% of regional brokers. Regional brokers are more likely to say growth would come from offering new services (36%), compared with 32% of local brokers and just 25% of national brokers. Conversely, regional brokers are least likely to say growth will come from new customers (26%, compared to 39% and 38% for local and national brokers, respectively).

Market challenges

When asked about industry/market challenges, insurer service topped the table for 24.3% of brokers. That said, the top five concerns are separated by just 1.6%: underinsurance (23.9%), broker consolidation (23.5%), competition from the direct channel (23.1%) and recruitment challenges (22.7%) occupy the rest of the top five issues. 

There is, however, a clear winner when asked how insurers could improve service: more face-to-face meetings (41%). Other areas identified by brokers included increasing underwriting licences (21%), flexibility on risk vs premium (20%), help in detecting underinsurance (20%) and faster quotes (19%).

Again, broker responses are somewhat determined by size of broker. For local brokers, the biggest request after face-to-face meetings is help in detecting underinsurance (29%). Just 18% of regional brokers and 16% of national brokers flag this as an industry concern. Regional brokers, meanwhile, are more interested in faster quotes (22%) than their local (13%) and national (17%) counterparts.

Underscoring the importance of face-to-face meetings, 75% of brokers agree with the statement that they ‘want to work with an insurer with a strong local/regional presence’. This is most keenly felt by regional brokers, at 81%, compared to 75% of national brokers and 67% of local brokers.

What brokers want (from insurers)

Size of brokerage is also a factor when it comes to what brokers want from insurers. For local brokerages, having access to data and insight when reviewing a customer’s business is top of the list (40%). In fact, 71% of local brokers agree with the statement that ‘data is increasingly important to make more informed decisions’. National brokers signal faster quotes (40%) is their key ask of insurers, while regional brokers are most likely to ask for clearer wordings (33%).

Risk management support is popular with brokers of all sizes, with 28% of brokers across the board asking for more insurer support in this area.

Dave Martin, Managing Director, UKGI Commercial and Chief Distribution Officer, Aviva, says, “With BIBA just days away, Aviva’s Broker Barometer survey paints a clear picture of how brokers are feeling as we head into the biggest industry event of the year.

“It’s great to see brokers’ optimism around growth prospects return to pre-pandemic levels. Although economic headwinds remain, brokers are clearly looking for opportunities to expand, and we are well positioned to support our broking partners whether they plan to grow organically, by offering a wider range of services or by growing their customer base.

“Insurers clearly have more to do to improve service levels – nowhere more so than through increasing face-to-face engagement. Our recent opening of new Aviva branch locations in Chelmsford and Southampton will make us even more visible and responsive to brokers in those regions, enabling more face-to-face meetings, brokers’ top request from insurers.

“We look forward to welcoming brokers to our stand at BIBA to talk about the issues that are important to them, and to discuss ‘what’s next?’”

Authored by Aviva