Technology spurs further growth in the UK schemes market
Technology is driving substantial change in the UK schemes market, according to the latest survey of schemes brokers carried out by UK General, the niche and specialist insurer.
The findings reveal a 24% increase in the number of brokers trading schemes on their own websites during the past two years, with social media identified as likely to provide the biggest opportunity for schemes growth during the next three years.
Karen Beales, UK General managing director, said: “Technology is creating further headroom for growth in schemes, and we are confident that there remains plenty to go for. 60% of brokers are trading schemes via their own website, which means 40% are not, so I urge brokers who are not using technology to get online before they miss the boat, and quickly.”
She added: “Brokers are telling us that white-labelled schemes and mobile accessibility will have the greatest impact on the market.”
Karen explained that this is the fourth annual schemes survey conducted by UK General Insurance, and it has been carried out in association with Insurance Times, giving over 300 general insurance brokers the opportunity to voice their opinions and help shape the future of the UK schemes market.
70% of brokers believed that the general insurance market has become more geared towards schemes, and 68% said that this growth has been achieved through specialist and niche classes of business as opposed to mass market.
84% of brokers revealed that their schemes business has grown over the past five years with only 4% saying it was flat and 12% that it has declined. When asked what the biggest threat was to scheme brokers, increased competition was the number one concern (55%) closely followed by meeting regulatory and compliance requirements (43%) and aggregators accessing ‘niche’ products (43%). However, market confidence remains high as 79% forecast their schemes business will increase or substantially increase by 2019.
Brokers also commented that price is still by far the most important purchase decision for their customers, with 91% in agreement, up 4% from 2015. Breadth of cover, customer services and ease of access are also important criteria for purchasing an insurance policy.
Karen said: “We had a 33% increase in broker participation in our research this year which makes the findings much more robust and underscores tour efforts to shine a light on broking attitudes towards this ever more crucial market segment.”