Article date: 10 September 2004
Impending FSA regulation is the primary – and increasinglyominous - worry among brokers, according to the latest NorwichUnion research.
The company’s bi-annual barometer of the broker marketshows that nearly a fifth (17%) see FSA regulation as their biggestchallenge, an increase in seven per cent since the end of lastyear.
In particular, the group of predominantly family-run brokerswhich are currently the market’s most pessimistic -categorised in the research as "Fading Families" – are lessprepared and in need of greater support for regulation. A similarpicture emerges for the smaller, independent brokers – termedas "Corner Shops" - who focus on the personal touch. More than aquarter of brokers in each group (26% and 28% respectively) feelthreatened by the new industry standards.
Only 56% of the "Fading Families" group have prepared for theFSA, compared to 70% among the so-called "Techno Savvy" brokers– pro-technology brokers who don’t see regulation ashaving a major impact on their business.
Despite this, almost two-thirds of broker businesses areplanning to expand in the next 12 months. At the same time, thereis evidence that a large number will retire as soon as they arefinancially able.
Other aspects of the research show that technology is viewed asa mixed blessing, benefiting some brokers while leaving othersbehind. Most intermediaries see E-broking as an opportunity, but inneed of greater tailoring, especially for commercial linesbusiness.
After regulation, 15% of brokers cite competition as the majorchallenge, though the number feeling the pressure has dropped sevenper cent compared to last year.
Norwich Union’s intermediary business director, KenWallace, said: "While regulation is clearly a worry for somesections of the broker community, the overall impression from ourresearch is positive, with almost 85% saying they are optimisticabout the future. "
For further editorial informationcontact:
Jon Clements at Staniforth, tel: 0161 2740100/mob: 07989 414486 or David Ross at the Norwich Union PressOffice, tel: 08703 666865/mob: 07786 526350
Notes to editors
Norwich Union Insurance
- Norwich Union is the UK's largest insurer with a market shareof around 14 per cent
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- one in five households
- one in seven motor vehicles
- more than 800,000 businesses
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