FEATURES Regional Review: Glasgow
Writer: Martin Friel Contact Details: mjfriel1999@yahoo.com
Deadline: 5 October, 2024 Very much the insurance centre of Scotland, Glasgow has seen a significant amount of attention of late, with insurers making office and personnel moves to give their trading efforts in the city more focus. In August Arch Insurance’s UK regional division has announced it has opened a new office in Glasgow as part of its growth strategy for the region. Located in the Onyx Building in what the insurer describes as “the heart of Glasgow’s business community”, it added the regional hub will aim to provide local brokers “greater access to Arch’s expanding underwriting division”. https://www.insuranceage.co.uk/broker/7955325/arch-expands-presence-in-glasgow-with-new-office The move came less than a month after Aviva shifted its offices in Glasgow’s city centre financial district to accommodate 26 employees and serve as a base for its mid-market, distribution, schemes and GCS teams. https://www.insuranceage.co.uk/insight/7955233/aviva-expands-its-presence-in-glasgow Meanwhile, QBE appointed Chris Long to a newly created role, head of trading for Glasgow/Belfast in October 2023; a month after Chris Hanson was named as manager for the North [which includes Glasgow] at Hiscox as both insurers sought to boost their regional business. https://www.insuranceage.co.uk/insurer/7953794/qbe-adds-fifth-trading-head-for-glasgowbelfast The city – once known for resisting the lure of consolidators – has also seen a ramp up in M&A activity among local brokers. Howden bought Glasgow-headquartered personal and commercial lines broker Laurie Ross at the beginning of 2024. https://www.insuranceage.co.uk/insight/7954378/howden-buys-scottish-broker-laurie-ross JMG Group-backed Greenwood Moreland bolstered its presence by buying Glasgow-based Calcluth & Sangster Insurance Brokers in September 2023; Seventeen Group bought Glasgow-based broker CCRS in August 2022; and Acrisure moved into the Scottish market at the start of 2023 purchasing Glasgow-based Affinity Brokers. https://www.insuranceage.co.uk/broker/7953687/greenwood-moreland-lands-biggest-deal-since-jmg-group-backed-mbo https://www.insuranceage.co.uk/broker/7950956/seventeen-group-buys-scottish-broker-ccrs https://www.insuranceage.co.uk/broker/7952301/acrisure-snaps-up-affinity-brokers-in-scotland Against this backdrop Insurance Age plans to take a deep dive into the local insurance market and find out how it is bearing up to wider socio-economic trends. Among the areas that will be covered are insurer-broker relations in the city, not least the importance of local trading; and levels of service. The article will also look at recruitment and training; as well as client retention on established business and how Glasgow is changing in terms of the make-up of the firms in the local economy – and the impact that has on the products and services that brokers offer. Is it all about the city or do brokers reach out to serve clients across Scotland and the UK? Finally, it will look at the levels of local competition including broker consolidation, start-ups, office openings/expansions and the broader insurance eco-system in Glasgow and surrounding area. The piece will highlight any notable trends, both recent and longer term, and get a sense of how optimistic or otherwise the local players are about growth and profitability in the area.
The regulatory demands to provide ‘fair value’ and what brokers need to do to appease the FCA over Consumer Duty
Writer: Ida Axling Contact details: idaaxling@gmail.com
Deadline: 5 October, 2024 Brokers are still struggling to provide adequate evidence they are appropriately assessing whether their remuneration is consistent with the fair value of the products they are selling. That was one of the conclusions of the Financial Conduct Authority’s latest Thematic Review: Product Oversight and Governance – General Insurance and Pure Protection, published in August. https://www.insuranceage.co.uk/regulation/7955338/fca-brokers-struggling-to-marry-remuneration-with-evidence-of-fair-value-assessment The review which included 39 distributor firms – 29 GI and 10 PP – within its scope drew a number of conclusions in relation to intermediaries. Not least brokers product distribution arrangements not having enough detail and failing to adequately consider key areas like distribution strategy, target market, remuneration and the product’s intended value. The regulator also said some brokers were providing insufficient MI and analysis to assess their remuneration, its relationship with their costs and the benefits and services they provide and its impact on product value, and a lack of evidence of any such assessment and its outcomes. Specifically, the FCA said only a few of the distributors in its review “provided adequate evidence that they had appropriately assessed whether the remuneration was consistent with the product providing fair value”. This included assessing the interaction between the price paid by the customer, the extent and quality of the distributor’s services and whether any remuneration would mean the product ceased to provide fair value. There were also issues around delegated authority relationships between brokers and insurers with the FCA finding that where the intermediary substantially undertook all the activities for creating, developing and designing the product, some insurers relied totally on the intermediary’s work. With all this taken on board this article intends to look at broker efforts to appease the FCA over its Fair Value regime. Do brokers, insurers and market expert consultants agree with the findings?
What actions have already been taken, is evidencing of current success and progress strong enough in the broking market? It will in turn ask if there is a disconnect between the regulator and brokers over what is realistically achievable [and actually beneficial for customers] within the boundaries of the resources available to smaller firms. Is there a danger other products could fall foul of a wholesale suspension like GAP did at the start of the year? https://www.insuranceage.co.uk/insight/7954475/gap-insurers-suspend-sales-after-fca-concerns-on-fair-value https://www.insuranceage.co.uk/regulation/7955339/fca-warns-it-might-repeat-gap-intervention-in-other-product-sectors The article will also question what other actions the FCA could take outside product sales freezes if it decides progress is too slow. Finally, the piece will investigate what guidance brokers are looking for and how the regulator could communicate its ambitions and plans for the intermediary market in a clearer and more transparent manner; and how this help could manifest itself. | 