Charting the shift in personal habits

As the old phrase goes: there are lies, damn lies and there are statistics. This is what many brokers may be telling themselves when reading the findings of the recent Defaqto report Home Insurance in the UK, which charts the rapidly diminishing grip brokers have on market share in personal lines (see p7). In short, the report illustrates the shift in customers' buying habits to direct models over traditional brokered sales models, which has paved the way for those supermarkets and bancassurers that now sell direct.

This study, which strongly hints at personal lines broking becoming extinct by the turn of the decade if they continue to haemorrhage market share at current rates, is more concerning than the unfounded pre-GI day doom-mongering about broker longevity.

While competition from the new breed of personal lines vendors threatens to finally do away with traditional broker models for personal lines all by themselves, insurers - keen to keep abreast of buying habits - are additionally engaging in activities that threaten to erode their broker support.

But the gargantuan marketing budgets the banks and supermarkets wield makes an opposing marketing campaign, tackling this onslaught head-on, prohibitive for brokers.

All indications suggest that targeted marketing, coupled with innovation, is already proving lucrative for some. Budget, with its lucrative white-labelling operation, Motorquote's innovative use of the internet and the many keeping their corporate clients happy by providing additional personal covers, illustrates the staying power brokers are renowned for that may see them win through.