Scarrett: brokers need to show agility

If brokers are to retain a grip on their current 55% market share in general insurance, they must show great agility in predicting what future customer buying habits would be.

So was the view of Norwich Union put forward by Phil Scarrett, director of regional business north, who also considered that small brokers would decline over the next five to 10 years, but that the business would remain in the intermediary channel. However, he added: "It is not all over for brokers in personal lines; their skills play a key role in catering for those who require a hands-on advisory service."

He continued: "There is a cautionary need to be aware of the pressure that is continuing to build from direct sellers and affinity partners and other retailers, and there is therefore a need to look at your own business models to make sure they reflect those continuing pressures.

"There is a serious challenge in the commercial market with direct offerings to sole traders. The online SME market is estimated to be worth £1bn in the next two to three years." In response to this, however, brokers ought not to be defensive, but set an agenda that perceives how clients want to trade in future. He added: "This should be underpinned by technology with a range of services and information available online."

In conclusion, he said that NU had identified the characteristics of the future winners and losers. "Brokers that will not survive are those that resist change, compete on non-value-added areas and do not develop staff or invest in the business. The winners will invest in technology, have a robust strategy, act as partners with their insurers and customers, take sensible margins and embed compliance."