Brokers are growing their incomes and the number of customers on their books but ambitions to develop their businesses further are being thwarted by the dwindling numbers of experienced staff in the marketplace.
Intermediaries have spoken of plans to increase staff numbers in the next six months due to increased complexities of doing business but according to Lumley’s first annual benchmark survey of more than 100 brokers, 43.2% of brokers found that either their own structure or staff retention issues had the greatest impact on their business performance.
However, 59.4% stated they were planning on increasing staff numbers in the next six months due to increased complexities of doing business. Around 88% indicated they had no plans to reduce the number of staff.
“This response from brokers highlights a real disconnect between broker ambitions and the ability to grow,” Lumley CEO John Nagle said. “Difficulty finding experienced staff was a common theme”
The survey found 75% of brokers were growing their income and 53% had seen an increase in the number of customers on their books.
Brokers are making more money from liability and professional indemnity than any other type of insurance but policyholders have downgraded or ceased buying coverage for personal lines – home and contents and property.
The latter has prompted concerns that underinsurance and affordability is still rife in Australia.
Commercial lines, on the other hand, is increasingly profitable. The insurer found that 45% of brokers had witnessed an increase in demand for liability followed by 44% in PI, and a further 44% in management liability.
However, 35% of respondents are downgrading or ceasing personal lines and property coverage.
A further 78% of brokers stated that their business insurance customers have inadequate cover.
“This reinforces the need for all Australians to undertake regular reviews of their assets and risks to ensure they are adequately insured,” Nagle said.
Up to 57.4% of customers indicated that rising insurance premiums was their biggest concern, followed by concerns over whether they will be covered when they claim (16.8%).
Brokers were also asked if their clients understood that premiums had rising to cover the rising cost of claims, doing business and reinsurance.
Around 77% of brokers said their clients understood this and asked them to shop around for alternate cover on their behalf.