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Brexit, inflation and rising interest rates aren’t stopping UK brokers from eyeing growth, a new report from Aviva reveals today.
The current economic climate is not hampering growth plans: more than half of brokers say the conditions have no impact on their business, and 42% are planning to expand, the research found.
Phil Bayles, managing director of UK intermediaries at the insurer, described the findings as “cause for optimism,” and said the market was doing well on the ground despite mainstream media coverage suggesting a difficult economy.
“If all you did was read the news you’d probably think we were teetering on the brink of a recession, but the reality seems to be more positive than that,” Bayles told Insurance Business, pointing to GDP growth this year and the current low levels of unemployment.
“On the ground, I think the economy is doing OK. People get distracted by all the Brexit and interest rate coverage and assume it’s going to kill everything off. But outside of the news agenda, the economy is doing…better than you would think.”
Many of the UK’s brokers are SME businesses and as a result are inherently resilient, the director said.
“A lot of these brokers are entrepreneurs and go-getters. By their very nature, they tend to be a bit more entrepreneurial and positive,” he said. “There’s a sense of resilience and get-up-and-go.”
The research also revealed a lack of planning among broker owners, with only one in 10 having a succession plan in place. Meanwhile, 9% of brokers expect to leave the industry within the next 12 months.
Bayles urged broker owners to consider the importance of longer-term thinking when it comes to planning for the future.
“Succession planning is vital for any business wishing to protect its legacy, especially owners who intend to leave or retire within the next five years,” he said.
The research also highlighted cyber insurance as the biggest growth area in terms of demand from clients. According to Bayles, those brokers that aren’t offering cyber should ask themselves why.
“If you look over the last five years, it’s probably the most important risk class to emerge,” he said. “It’s essential these days for brokers to understand it and offer it. It’s not a nice to have anymore, it’s an essential.”
