Explore the benefits of placing more business in fewer markets
It’s almost unbelievable and somewhat alarming that the Broker Insights platform now collectively has over 1,000 placement markets!
This milestone highlights the complexity brokers face when managing placement. With over 1,000 carriers [and growing] to choose from, the UK commercial market is an intricate sector for brokers to navigate.
Analysis of data within the platform shows that brokers hold an average of 69 agencies, ranging from a handful right up to several hundred. The data analysis also showed that on average:
This analysis suggests that on average, brokers only actively utilise around half of their agency base.
Brokers are keen to support clients and will seek out markets for niche business, but at what cost for the firm itself? What analysis is being completed on the on-cost for maintaining a large number of agencies and the profitability of business placed?
If a broker maintains an agency for a handful of policies, the on-cost of maintaining the agency may be greater than the commission being received…!
Each agency must be subject to a Terms of Business Agreement and the ongoing relationship maintained in line with that agreement, each product reviewed, and policy wording understood, governance tasks undertaken, back-office account queries managed, and relationships built. Holding a large number of agencies is a significant undertaking.
Why is this so important?
Broker Insights has continually encouraged our broker partners to conduct placement strategy reviews via the platform, to explore opportunities to rationalise agency holdings and benefit from placing business in fewer markets.
There are several reasons why this topic refuses to go away and why it is extremely important for firms to address, specifically:
“Keeping it simple wherever possible is far more favourable from both a cost and a risk management perspective and this is where we find brokers need the most support.”
How can Broker Insights provide support?
Professional brokers will seek out markets for niche cases and will always place business with a market that is right for their client at that time. Over time, niche business once placed with a particular market may increasingly benefit from improving claims experience, or the widening of Insurer appetite, making it target business for our partner Insurers.
Brokers are encouraged to use the platform to identify market opportunities for their renewals. The Broker Insights’ Trading Team can help firms maximise their use of the platform, including the Placement Strategy page which can be used to review a firm’s held book.
Upcoming renewals can be analysed and referenced against our insurer partner’s underwriting appetites, with the platform highlighting opportunities to move business placed with smaller agencies via intelligent matchmaking.
If your firm would like to explore the platform’s functionality and benefit of placing more business in fewer markets, contact the team at Broker Insights today.Back to Blog