The personal lines challenge

There seems to be a 'current wisdom' that states that, to have any kind of future, brokers need to move away from personal lines and diversify into more sustainable areas of business, commercial lines being one. Some say the risk is failure if they do not, though I do not believe this to be true.

How many times have we heard the death knell being rung for brokers? It would be foolish not to recognise that brokers who want to stay active in personal lines face significant challenges. While they face stiff competition from the big brands, time and time again they have clearly demonstrated the strong affinity and value-add that they offer their customers. As a result, they have 30% market share and place £6bn worth of personal lines business. This is a distribution channel that is too big to ignore and in my own opinion represents significant opportunities for brokers and insurers alike.

I believe a strong partnership ethos is key in supporting brokers competing in the personal lines marketplace. This means a partnership that recognises the role of the broker and insurer in the value chain from a customer's perspective.

Brokers provide a valuable service by offering the 'personal touch' and a range of solutions, gaining an understanding of their customers' individual requirements and providing tailored advice - something other channels sometimes lack. Ultimately, brokers are the experts in what their customers want and working in partnership with an insurer encourages the development of insurance solutions that are both market leading and delivers what the customer wants - a win-win situation.

As the market continues to develop, we must not forget the role brokers can play in the affinity market. Some smaller affinity groups recognise the personal service provided by brokers as more attractive than negotiating a direct partnership with a large insurer.

In a market estimated to be worth £4.7bn (source: ABI), the affinity market makes up 24% of the overall personal lines insurance market, and with the growth predicted over the next few years, I am confident that the future holds many exciting opportunities and rewards for personal lines brokers both in their current market and also the growing affinity channel.