UK brokers and IFAs that fail to harness the potential of e-commerce will be driven out of business by tech-savvy rivals.
These so-called “Techno Savvies” are now the UK broker markets’ dominant group, representing about a third of intermediaries, according to new research by life and pensions manufacturer Norwich Union, part of the Aviva savings and insurance group.
They are also in favour of a less populated broker market and would not be unhappy if this was brought about by FSA regulations, says the Norwich.
The research across 400 brokers also identified three other principal business types in UK broking: “Corner Shops”, “Fading Families” and “Old Style Pros”.
The “Corner Shops” (26%) like to maintain the personal touch and independence of smaller companies while the family-run “Fading Families” (23%) tend to be the most pessimistic, seeing threats from all directions, including large retailers selling insurance, Government regulations and the contraction of the industry.
Finally, the “Old Style Pros” (20%) – with their commercial insurance focus – appear to hold no fear of the increasing diversity of insurance providers or advances in technology, instead looking to the loyalty of their business clients for future security.
Norwich Union’s intermediary business director, Ken Wallace, explains: “In the main, brokers are showing a positive outlook, with more than 80% saying they are optimistic about the future, though personal insurance brokers are less so than their commercial counterparts. It appears most agree that technology will play an important part in the offering to customers and those who refuse to embrace it will struggle.”
The findings also show that brokers dealing in commercial insurance feel less susceptible to competition and are also more likely to be expanding their business in the coming year. While overall concerns over competition are increasing, the fear of FSA regulations appears to have fallen.
Wallace adds: “Interestingly, the factor that brokers feel is having the most positive effect on the industry is ‘customers becoming more demanding’. We acknowledge that it is only the combined approach of insurers and brokers that can achieve this.”
Norwich Union distributes its own products through a variety of distribution channels, including independent brokers, corporate partners such as banks and building societies, and Norwich Union Direct.