Searching for a new career opportunity in this tough economic climate is difficult but you can give yourself an advantage by impressing potential employers with a wide knowledge of the insurance broking industry.
Knowing your role inside out is not enough to secure a position. Being clued up on current issues always helps to show your potential employer that you keep up-to-date on news.
There are a number of issues currently dominating the insurance broking sector. Here are the top four you should know about:
Insurance Brokers are under increasing pressure from the Financial Services Authority (FSA); soon to be the Financial Conduct Authority, which will be focused on how Insurance Broker firms are run and driving better outcomes for customers.
It will also look at whether companies are protecting client money and keeping it separate from their own.
The British Insurance Brokers’ Association (BIBA) has called for the FSA’s replacement to strike the right balance between protecting consumers and not harming Insurance Brokers’ businesses.
It has also urged the regulator to help create ‘more proportionate, appropriate and cost-effective regulation’ for low-risk Insurance Brokers.
The other side of the new FSA, the Prudential Regulation Authority, will be concerned with making sure client money is safe with insurers. European regulation called Solvency II will require insurers to hold more capital so customers can retrieve their money should a company fail.
As the UK slides into another recession businesses are feeling the pinch, with companies suffering a decline in turnover and often a fall in employees. This has hit Insurance Brokers hard as general insurance premiums costed on turnover and staff numbers fall.
Despite the fall in premiums the cost to Brokers of servicing remains static, meaning they are losing money just by servicing existing clients.
3. Soft premiums
Another upshot of falling back into recession is that businesses become more cost conscious, this is another contributor to the insurers allowing the soft market to continue.
An unhealthy focus on cost over quality of product, particularly when times are tight, means insurers are in a race for the bottom when it comes to premiums. Insurance Brokers, who are usually paid via commission, are forced to suffer a fall in income.
As businesses are more likely to shop around for insurance rather than renew automatically in a recession, Brokers are being hit by a double whammy of having to do more to retain clients and receive less commission for their efforts
4. Financial Services Compensation Scheme (FSCS)
The topic of cost rears its head again over the issue of the FSCS. Insurance Brokers have seen their FSCS fees skyrocket – some 50-fold in the past three years – as they pick up the bill for payment protection insurance mis-selling by credit intermediaries.
There have been calls for Insurance Brokers to be placed in their own sub-category of FSCS fees, away from sub-sellers of insurance such as motor traders, doctors and credit intermediaries.
Keep up-to-date on Insurance Broker news to ensure you are prepared for the future and able to spot new trends that will continue to give you the edge.
For more ideas on how the sector is changing, please download our eGuide ‘Four trends every general insurance professional should know’.
Guest Post: Tony Bates is the managing partner of IDEX Consulting, providing advanced talent management for the Financial Services sectors. You can read more on his expertise on how to progress careers in Financial Services by reading IDEX Consulting blog here. You can also find him on Google+ and LinkedIn.