The Burns & Wilcox United Kingdom team values the opportunity to gather with our broker colleagues at the BIBA Conference on 15th and 16th May in Manchester and strengthen our relationships through face-to-face meetings.
Together we will discuss industry trends, share company updates and news, and collaborate on solutions that positively impact your clientele.
The theme of this year is “What’s Next?”
As we explore what is in store for the future of the insurance industry, here, first, are a few trends we are seeing impacting brokers today:
1. There is growing competition which gives brokers more choice
Factors such as an improved rating and underwriting environment and a positive profitability environment coupled with a slowdown of treaty reinsurance costs helps. Additionally, above average investment returns have allowed 2023 to become a profitable year for most carriers. For example, Lloyd’s turned a £5.9 billion profit, a 127 percent increase year-over-year.
With increased competition in the Property and Casualty market, brokers can now find more options for their clients, with minimal rate increases, and eased exclusions and terms and conditions.
2. The impact of inflation continues to motivate insureds to make policy decisions that may not always be in their best interest
Clients are feeling the stress of making tough budgetary decisions. There is less disposable income for both business owners and the average household. Meanwhile geopolitical, global economic, and supply chain issues continue to weigh on the market, which in turn extends persistently stubborn inflation.
In some cases, insureds are either cutting back or eliminating insurance coverage altogether. Brokers should focus on educating their clients about the dangers of being underinsured, and the financial impact of an unanticipated claim.
3. Despite record carrier profitability, increased catastrophic windstorms and flooding incidents will continue to impact the market in the short- and long-term
Catastrophic wind, hail, and flooding incidents are on the rise. Many of these storms are more extreme in general, with added volatility in weather patterns throughout the UK. While catastrophic storms may not be as varied or intense as other parts of the world, more frequent incidents and rising claim costs could put added pressure on price and capacity.
4. Businesses face continual financial pressures
Sectors such as hospitality are under pressure with increased rent, higher labor costs, and other overhead costs like the price of energy. All are making it difficult for restaurant and pub operators to succeed financially.
5. There is a massive opportunity for MGA growth
Market demand for MGAs is expected to increase as they develop unique and niche solutions to meet the demands of the market.
6. Carrier consolidation may increase in the next few years
It will be interesting to see how merger and acquisition activity evolves over the next couple of years. Activity is on the rise and the impact of MGAs and increased profitability should lead to further industry consolidation. In theory this could limit capacity and cap rate moderation.
7. Capacity has broadened but remains cyclical
It is no secret that carriers were more selective in 2021 with structured guidelines on how and when they made capacity available. Capacity has since opened up with greater profitability and the desire for expanding portfolios. Yet capacity remains cyclical and will shift based on several factors, including the reinsurance market, litigation trends, catastrophic claims and inflation.
The bottom line for brokers is that opportunities remain plentiful for new and existing business growth. Having more carriers willing to offer coverage and increased capacity allows brokers to find options that best fit the needs of their clients, increasing client loyalty and retention.
Connect with us at – or during BIBA
If you are planning on attending BIBA, feel free to reach out to your Burns & Wilcox contact to arrange a suitable time to meet. If you are not attending BIBA, we would still love to set up a meeting to discuss your clients’ needs and map out a strategy that benefits all parties.
I encourage you to follow Burns & Wilcox on LinkedIn to keep up to date with our latest news.
Thank you for your time and continued partnership. Burns & Wilcox will be here to help find the solutions you need to even the most challenging insured profiles.
Sincerely,
Stuart Kilpatrick
