The authorised representative system is on the way to becoming the “dominant force” in the insurance intermediary sector, one industry leader has said.

Adrian Kitchin, managing director of Resilium, said that the intermediary industry could be a changed landscape over the coming years as AR networks are “already becoming the dominant force” on the market.

“The days of small, independent brokerages may not be numbered but they are certainly under great pressure,” Kitchin told Insurance Business.

He noted that he sees the industry separating into three camps: smaller, specialised, independent brokerages; those backed by an AR or broker network; and larger broking houses. While the three-way split will be far from cut and dry, Kitchin noted that those brokerages or ARs with larger backing will be able to offer a unique set of services that independents will be unable to match.

“Unless you’ve got scale, unless you’ve got the backing of a large network such as ourselves or the larger broking cluster group, the standalone independent generalists are probably numbered,” he said.

Kitchin stressed that the tradition of brokers and ARs not seeing eye-to-eye is also “falling away”.  As the AR model has become more understood, and those less professional AR networks have fallen out of the market, Kitchin said that the two market sectors have come closer.

Still, while the AR model has proven to be successful, Kitchin said that it is incumbent on every licensee to remain “very vigilant” on those already licensed and those moving into the AR system.

Resilium recently announced a host of changes to its network that will look to leverage the size and scope of Suncorp and help turn the network into Australia’s largest. The changes will see clarification for both clients and ARs as ownership has been transferred to the AR, rather than held by Suncorp, while an education program will also help business owners develop and push the next generation forward.