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Summary
The insurance broker market has been experiencing notable trends starting from 2020, including a diversification in the service offerings and a shifting landscape due to the impacts of technological innovation and the COVID-19 pandemic. With the British Insurance industry expected to pay over £6.2 billion in insurance claims related to the pandemic, brokers adapted by offering new products and extending services to accommodate the emergent needs of customers, such as covering quarantine-related expenses. Moreover, the sector has seen a growing role for insurance broking software with key players like Open GI, SSP, Acturis, and Applied Systems leading the way. Market structures are also changing; smaller firms continue to capture greater market share, challenging the dominance of traditionally large firms. Regulations have been evolving, particularly as the UK adapts to post-Brexit changes with the FCA overseeing the industry's conduct. While the British market has been well-established, with a direct contribution of 12 billion GBP to the British GDP in 2020, global insurance premiums were led by the United States with life and non-life insurance payments combined at around US $1460 billion in 2018. Key global players include Allianz with a 2020 turnover of 140 billion euros, and Axa with 96.7 billion euros, along with leading brokers like Marsh & McLennan Companies and Aon plc with turnovers of 17.2 billion dollars (2020) and 10 billion dollars (2017), respectively..### Evolving Trends in the Insurance Brokerage Market The insurance brokerage market is experiencing a dynamic shift with the interplay of several factors influencing its overall landscape. The increasing reliance on technology and the rise of small and medium-sized enterprises (SMEs) seem to be driving the market trends in a transformative manner. Insurance brokers have traditionally acted as intermediaries between clients and insurance companies, offering personalized advice on risk management and identifying the most advantageous coverage options. However, with the rapid growth of the internet and heightened innovation, the industry is poised to face escalated competition. Online platforms provide clients with abundant options for insurance coverage, challenging brokers to enhance their online visibility and offers. Despite the challenges, insurance brokers have seen opportunities, especially in the British market where the dominance of large firms is beginning to erode. SMEs, which have been continuously growing in number—approximately between 200,000 and 210,000 in recent years—are capturing a larger share of the market. This growth is not only reshaping the market structure but also driving demand as these businesses are often seeking insurance against daily operational risks. Moreover, customer expectations and interactions with insurance brokers are seeing a shift with emphasis on deriving the best value products and reliable support from brokers, although interactions may remain infrequent, with more than 50% of clients communicating with their brokers just once a year. The influence of technological advancements cannot be overstated. Investment into insurance technology has surged, with deals escalating from roughly 28 in 2011 to at least 150 by the third quarter of 2017. Financial backing has also witnessed a substantial increase, jumping from about 140 million USD to at least 1.6 billion USD over the same period. Four significant software providers—Open GI, SSP, Acturis, and Applied Systems—are taking the lead in the British market, offering a range of innovative solutions to brokerage firms. The enforcement of Covid-19 pandemic-related measures provided a stark example of the market's responsiveness. The industry has witnessed new offerings emerge to address the needs brought by the pandemic, such as policy extensions, additional clauses, and comprehensive products catering to companies and families affected by the crisis. Regulatory oversight remains a significant driver of market operations. In the UK, the Financial Conduct Authority (FCA) plays a pivotal role in maintaining order within the brokerage industry. Post-Brexit, new rules are expected to be introduced, reflecting the UK's autonomous stance from the European Union's regulatory framework. In summary, the insurance brokerage market is undergoing a period of change.### Prominent Players in the Insurance Brokerage Market Landscape The insurance brokerage market is an intricate web of firms that cater to a broad spectrum of risk management needs. These key players not only provide necessary coverage options but also bring innovation, stability, and expertise to the industry. Below we explore some of the most influential entities shaping the insurance brokerage landscape. **Allianz** stands as a behemoth in general insurance, with a robust portfolio that demonstrates its capacity to cater to a wide range of insurance needs across various sectors. **Axa** is another giant within the general insurance segment, providing an array of insurance products and services that address the complexities of both individual and corporate risk management. Turning our lens towards the insurance brokers who play the role of matchmakers between clients seeking protection and insurance companies offering policies: **Marsh & McLennan Companies** has solidified its position as a leader in the field, investing in client relationships and adapting to the evolving risks in the global market. **Aon plc** operates as a powerhouse within the sector, known for its innovative approach and global reach, offering tailored solutions to meet diverse client demands. **Jardine Lloyd Thompson Group** (JLT), another major player in the brokerage market, stands out for its expertise in specific industries, bringing in-depth knowledge and specialized services to its clientele. All these firms navigate within a market that is in constant flux, and they are supplemented by the essential supports of insurance broking software providers: **Open GI** leads in this tech subsector, delivering software that enables brokers to be more efficient and responsive in their operations, thereby enhancing the overall client service experience. These companies, noteworthy for their scale, scope, and specialization, continue to drive innovation and maintain the delicate balance of the insurance brokerage market, ensuring that clients have access to the best products and services to manage and mitigate their risks effectively.
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- Number of pages : 30 pages
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- Last update : 01/07/2021
Summary and extracts
1 Market summary
1.1 Presentation and market definition
Insurance brokers are part of the largest category of intermediaries, figures that facilitate the reconciliation of supply and demand within a given organizational context (e.g. real estate, insurance). Unlike insurance agents, who are employed by an insurance company, brokers work on behalf of the client and have no working relationship with the insurance company. Brokers analyze the risk profile of their client and evaluate among the market proposals the most advantageous insurance coverage for them, in terms of cost-benefit.
The role of the broker is therefore not only to sell a particular policy, but also to provide advice on a variety of solutions. Insurance brokers can work independently or for a brokerage firm and can represent two types of clients: private or corporate.
The rise of the Internet and innovation in the sector has contributed to the development of the industry in various ways. This is a problem for insurance brokers as it means increased competition, due to visibility becoming more difficult and the online offer more abundant.
In the UK, the market has been traditionally controlled by a small number of big firms. However, times are changing and SME's are starting to get a larger slice of the pie. In fact, market shares of big insurance brokers have been falling due to the rise of SME's in this sector. While technology provides one of the biggest threats to this industry, it can also provide opportunities if firms are able to embrace it and take it on to become more efficient and competitve.
1.2 A fast-growing global market
The global insurance market was valued at *** billion USD in ****, with an expected CAGR of *.*% until ****, to reach nearly *** billion USD [***].
Size of the global Insurance Brokerage market World, ****-*****, in billion USD Source: ****
The geographical region that is expected to experience the strongest growth in this period is Asia-Pacific, with ...
1.3 The well-established British market
Indirectly, it is estimated that the insurance brokerage industry contributed **.* billion GBP to the British economy in ****. Directly, however, the industry provided ** billion GBP to the British GDP in the same year [***].
The insurance brokerage market in the UK has reached its maturity and has not been growing at strong pace. ...
1.4 The impacts of the Covid-19 pandemic
As a result of the Covid-** pandemic, the British Insurance industry is expected to have to pay more than £*.* billion in insurance claims [***].
While most insurance policies do not cover for pandemics, they cover other aspects that were impacted by the pandemic:
Medical expenses as part of a travel insurance Employers' ...
2 Demand analysis
2.1 Understanding the demand drivers
The European insurance market is extremely diverse. Over the last decades, the population of European insurance intermediaries has fluctuated to meet the demand of the specific national populations, making it difficult to identify a general trend.
2.2 A growing number of SME's to stimulate the market
A very important aspect of the insurance brokerage market is the number of companies operating in a country and whether or not this number is growing. This is because businesses (***) are exposed to a wide range of risks on a daily basis that they need to be insured for.
While the ...
2.3 The interaction between clients and insurance brokers
A study conducted by PKF Littlejohn helps to understand the expectations that clients have from their insurance brokers, as well as the interactions between both of them.
The study shows that the main thing clients get from their insurance brokers is the feeling that they are getting the best value product ...
2.4 A sector that is expected to be disrupted
Although the insurance brokerage market is one that does not tend change too much over time, recent innovations and investments into technology are slowly changing the sector.
Since ****, the number of deals and the amount of money invested into insurance technology has been growing. In fact, while in **** there were ** deals ...
3 Market structure
3.1 Insurance brokerage players
As of ****, it is estimated that there are *,*** companies operating in the insurance brokerage market in the UK. These companies are responsible for **,*** jobs [***].
There are * key players that dominate the market:
Aon Marsh & Mclennan Companies JLT Group Willis Arthur J Gallagher International
With the exception of JLT Group, which has ...
3.2 A market that is becoming less concentrated
The insurance brokerage market in the UK has traditionally been controlled primarily by a small number of big and powerful firms. However, times are changing. Smaller businesses (***) have been gaining market share at the expense of bigger players.
In fact, while in **** the market share of big insurance brokers was of ...
3.3 The growing role of insurance broking software
With the growing importance of technology in the insurance brokerage industry, we must certainly understand what are the main players that are innovating in this industry and providing insurance broking software to their clinets.
There are four main firms which can be considered the leaders in this segment in the British ...
4 Analysis of the offer
4.1 The different types of insurance available
In the insurance sector, the main distinction is between life insurance and non-life insurance. As far as non-life insurance is concerned, the offer is very diversified, as shown in the table below summarising the different offers:
In particular, we can observe the following trends in the offer:
Enrichment, especially in the ...
4.2 The offers of insurance brokers
Insurance brokers thrive on uncertainty. The more risks an industry provides to a business, the more desired the services of an insurance broker becomes to the business in question. This is why the services of insurance brokers appeal greatly to bigger businesses - businesses that have more complex operations.
In general, ...
4.3 New offers to face the Covid-19 pandemic
The insurance industry has implemented new measures to provide support for the COVID-** pandemic. These include: the suspension, extension and deferment of premiums for life insurance policies, non-auto damages and auto coverage, the blocking of all actions to recover unpaid premiums and deductibles, the extension of existing guarantees with specific clauses, ...
5 Rules and regulations
5.1 Regulations
The activity of insurance brokers in the UK is governed by the Financial Conduct Authority (***).
Due to the UK leaving the European Union, EU regulations no longer apply to British companies operating in this sector. This is why new rules will be soon coming into place to regulate this industry.
The ...
6 Positioning of the actors
6.1 Segmentation
- Allianz
- Axa groupe
- Aon plc
- Marsh & Mclennan Companies
- Jardine Lloyd Thompson Group
- Open GI
- Lyanne
List of charts
- Total des primes globales
- Primes d'assurance vie et non-vie
- Pays où les primes d'assurance vie et non-vie ne sont pas les plus importantes
- Répartition de la prime d'assurance vie et non-vie par canaux de distribution
- [Copy] Size of the global Insurance Brokerage market
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Latest news
Lyanne, the new Robin Hood of insurance - 01/12/2021
- Year-old start-up raises 1.2 million euros from Firstminute Capital
- lyanne covers 9 categories of contracts: home, borrower, car, work accident, foreign holiday, school, pet and credit insurance.
- 4,000 users at the start of the project
- Lyanne handles all claims for a flat fee of 49 euros per claim
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