Sentiment insight

The Sentiment Survey published in this edition of PB reflects brokers' fears about insurers competing for growth and softening the market. But these appear optimistic in growth terms. As the size of the market will fall, very few brokers will achieve any growth in the next 12 months unless they acquire. I also think they are optimistic about Katrina. The UK market is too profitable for insurers not to compete and they may in fact divert capacity away from the Gulf of Mexico and energy into the UK and Western Europe where results are better and more predictable.

The survey seems to accurately reflect the impact of regulation on the market as it costs a lot, causes a great deal of concern, takes up management time, adds to red tape and is having no real benefit.

Service from insurers is still an issue and seems to be deteriorating. It seems brokers are too ready to accept poor service and are not prepared to punish the worst performers by taking business away. Until brokers start acting, levels of service will not improve.

The return on acquisitions seem normal. Two per cent expect to sell and 24% expect to buy - a big gap in expectations that could lead to prices for brokers remaining high.

Tony Cornell

Cornell Consulting.