BIBA at odds with CBI and PwC over insurance profitability
Thu, 02 Jul 2009
A report from the Confederation of British Industry (CBI) and PricewaterhouseCoopers (PwC) that profitability is growing in the insurance broker sector appears to contradict the view of the British Insurance Brokers Association (BIBA).
BIBA's own research indicates that brokers saw a reduction in businesses looking for commercial cover during the first three months of the year.
Graeme Trudgill, corporate affairs executive at the association, suggested that the CBI/PwC survey had perhaps not included BIBA's recent findings.
He added: "As far as profitability in the insurance broker sector growing, this is at odds with the findings of BIBA as our reports say that clients are reducing their spend, so premiums are lower therefore brokers' income is lower.
"Demand has generally reduced and while there is plenty of capacity in the market there is also a lot of competition."
Mr Trudgill commented that recruitment and salaries within the industry are on a freeze and clients are finding it hard to get credit, so the effects of the downturn are still being felt.
BIBA recently reported that 45 per cent of brokers that have seen a reduction in levels of commercial cover have witnessed clients taking on more risk themselves.
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