PriyaPatel
TL;DR
- The cost of regulation for insurance brokers has increased by 40% since 2019, leading many brokers to exit the market.
- The potential exodus of brokers is concerning as they arrange £74bn of insurance annually.
- Regulation updates and the introduction of the Consumer Duty have added to the complexity for brokers.
- Brokers require a data-driven approach to gain insights and anticipate compliance requirements.
- The SmartBroker™ tool offers data-driven insights to help brokers identify new opportunities and improve client retention.
The cost of regulation for insurance brokers, particularly small independent firms, has surged by 40% since 2019, prompting many brokers to exit the market. As a result, the independent broking sector in the UK has seen a decline of 0.4% per year on average over the last five years. The British Insurance Brokers’ Association (BIBA) has raised concerns about the overwhelming regulatory burden on smaller brokers and the disproportionately high cost of regulation. Staying on top of ever-changing compliance requirements is a major challenge for brokers, especially smaller ones. The introduction of the Consumer Duty this year has added to the complexity, requiring brokers to prioritize customers’ needs and undergo fair value assessments. Brokers are anticipating new regulatory reforms in the coming months and years, which will require proactive understanding and adherence to updates. To tackle these challenges, a data-driven approach becomes essential. Brokers need to leverage real-time customer information and insights to gain a holistic view of each customer’s financial situation and anticipate any risk profile changes that may impact compliance requirements. This is where SmartBroker™ comes in. SmartBroker™ is a revolutionary tool that provides data-driven insights to help brokers identify new opportunities, build long-term relationships, and drive growth and revenue. The tool enables brokers to prospect with precision, prepare better underwriting submissions, tailor outreach with data-driven insights, and increase client retention by being alerted to changes in clients’ business and risk portfolios. By adopting a data-driven approach, insurance brokers can not only tackle the cost of regulation but also drive growth and navigate the evolving landscape.
