Insurance broker numbers to plunge – survey

Except for insurance brokerages, companies across the finance industry are expected to see ‘more solid increase’ in employment

Insurance broker numbers to plunge – survey

Insurance News

By Louie Bacani

Companies across the finance industry are expected to increase their workforce in the second quarter of 2017, but insurance brokerages are expected to cut jobs, according to the latest CBI/PwC Financial Services Survey.
 
The new study polled 98 financial services companies from January to March, a period when 30% of firms increased employment while 19% downsized their staff.
 
In the next quarter, numbers employed are expected to see a “more solid increase” (+25%), the survey says, with headcount expected to rise in all sectors except that of insurance brokers (-31%).
 
Companies’ spending for employment training also expanded at a “brisk pace” in the first quarter, which is expected to continue over the next three months.

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In terms of business expansion in the next 12 months, companies view statutory legislation and regulation (68%), level of demand (67%) and competition (56%) as the most significant potential constraints on growth.
 
Financial firms are expected to increase IT (+46%) and marketing (+11%) spending in the same period, but they will cut back slightly on other forms of capital expenditure such as land and buildings (-4%) and vehicles, plant and machinery (-11%).
 
Overall profitability rose significantly in the first quarter, with income from fees, commissions and premiums rising by 17%. From April to June, however, growth is expected to slow at 6%.
 
Total operating costs are expected to rise next quarter (+8%) while average costs are predicted to decline (-10%).
 
“It’s great that financial services firms have begun the year with a spring in their step – notwithstanding Brexit uncertainty – with volumes expanding at a robust pace, profitability improving and hiring on the up,” said CBI chief economist Rain Newton-Smith.
 
Newton-Smith said growth is “likely” to slow as the year goes on, amid “broader uncertainty” and higher inflation.
 
“Firms continue to keep a close eye on the challenges ahead, from concerns over labour shortages and the impact of regulation costs on business expansion,” he added.
 
 
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