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British Insurance Brokers Association
Manifesto 2012Protecting our future
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The British Insurance Brokers Association (BIBA) is the UKsleading general insurance organisation representing the interestsof insurance brokers, intermediaries and their customers.
BIBA membership comprises of just over 2,000 regulated firms havingmerged with the Institute of Insurance Brokers (IIB) in November 2011.
Independent insurance brokers are the agent of the client and put theclients interests first. Brokers provide professional advice to businessesand individuals, playing a key role in the identification, measurement,
management, control and transfer of risk. They negotiate appropriateinsurance protection tailored to clients needs.
We are the voice of the insurance sector advising members, theregulators, consumer bodies and other stakeholders on key insuranceissues. We also provide unique schemes and facilities, technical advice,guidance on regulation and business support and are helping to raise,and maintain, industry standards.
We work closely with the Chartered Insurance Institute supporting theircode of ethics, chartered status and access to training. We are committedto meeting the challenge of helping individuals and businesses accessinginsurance protection.
Our members employ more than 100,000 staff.
General insurance brokers contribute 1% of GDP to the UKeconomy, the same as the agricultural sector.
In 2011 through our Find a Broker service we helped more than400,000 people to access insurance protection, both online and viathe telephone.
80% of all general insurance commercial business is sold via aninsurance broker.
56% of all general insurance is sold via an insurance broker includinghome, motor, travel, commercial and industrial policies.
We run the largest insurance conference in the UK.
About us
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Attributed to:1BIBA 2The contribution of insurance brokers to the UK economy Report/Prepared by LondonEconomics 3ABI
1
2
1
3
3
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The benefitsof dealing with a broker
Our members treat customersfairly. They will:
Focus on the customersneeds
Make sure the customer
understands what is, and isnot, covered
Make choices clear by advisingof the range of products orservices they offer
Explain any professionaladvice they give clearly andhonestly
Clearly state the costs of thepolicy including any fees theymay charge
Provide clear informationand documents as well asany help needed with thepaperwork to make sure the
policy is issued promptly
Help the client get their claimpaid
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What is an insurancebroker?
The benefits ofdealing with aninsurance broker
General insurance brokers andintermediaries help millions ofbusinesses and individuals findsuitable solutions to manage their
risks and are regulated by theFinancial Services Authority (FSA).
Brokers are the agent of theclient, they work in their bestinterests, providing advice,guidance and choice on a rangeof risk management services andinsurance products.
They can assist with identification,measurement, managementand control of risk, arrangeappropriate insurance solutions
and represent their client in thenegotiation of claims settlements.
Insurance brokers have atradition of innovation andensure a competitive marketwhich enables individuals andbusinesses to manage their riskand support a resilient society.
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To represent and protect thebest interests of our insurancebroker and intermediarymembers
We strive to achieve this by:
Promotingthe services and thevalue of members contributionto the protection of our futures
with advice, guidance, access torisk management and insurancesolutions.
Influencingthe relevant decisionmakers and policy writers thataffect our sector.
Mission Statement
Maintainingand developinga stable business environmentin which our members operateby keeping them informed ofrelevant issues, providing a forumfor discussion and the exchangeof non-competitive information.
Supportingmembers bothcollectively and individually
through a series of facilities andsupport services.
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Empowering UKConsumers
Empowering UKBusinesses
Empowering theInsurance Sector
Empowering the UKto trade worldwide
Campaigning issues
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Supporting a sustainablerecovery in the UK
The economic crisis we haveall experienced during thelast couple of years is beingfollowed by a very difficultrecovery. Customers areunderstandably cautiousabout spending money, and
government is necessarilyengaging in retrenchment of the
public finances. Difficult timesmake the need for our membersservices particularly pressing.
Our members help customersaccess products and serviceswhich suit their risk management
and insurance needs.
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We are committed to workingwith government, businesses,regulators and consumers to helpensure a sustainable recovery andgrowth by:
Signpostingindividuals and
businesses that are strugglingto access insurance towards asuitable insurance product will helplead to growth in the UK financialservices industry.
Creating competition, a healthyand appropriately regulated brokermarket will lead to better outcomesfor customers and growth. Weare calling on the new regulatorto ensure a balance between theneed for consumer protectionand causing harm through overlyintrusive regulation.
Continuing to champion thegrowth of trade creditinsuranceto assist UK and international
sales particularly following thedevelopment with UK ExportFinance (formerly called the ExportCredits Guarantee Department)which now enables customers toaccess cover through the brokingsector.
Addressing significantunderinsuranceconcerns, whichwill provide greater protection,improved growth and fewerdisappointed claimants at the timewhen their need is greatest.
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Promoting the joint BIBA/CabinetOffice work which demonstratesthe tangible benefit of having abusiness continuityplan whichcan help turn an unacceptablerisk into one which insurers wouldwrite, leading to greater choice and
competition.
Calling for immediate reformof the Financial ServicesCompensation Scheme (FSCS)to reduce the burden on generalinsurance brokers and encouragegrowth. The 50 fold increase tointermediaries FSCS fees in thelast three years is a huge and unfairburden on our members.
Working with government tosupport the competitivenessand growth of the UK insurancemarket for internationally tradedinsuranceensuring the UK is anattractive place to do business.
Helping to create moreproportionate, appropriate andcost effective regulation. Forexample with the regulators
Threshold Condition 4 adequateresources, it is our view that ifthe regulator requires firms tohold more capital, that it shouldbe on the basis of consultedupon and costed rules, ratherthan a judgmental approach.Improvement to this could releasecapital to assist growth.
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Empowering UKconsumers
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In these difficult times,consumers are sometimesputting cost before adequatelevels of protection whichcould lead to them being underinsured or even uninsured.
Signposting consumers toinsurance access Signpostingwill help direct those customerswho find it difficult to obtaininsurance because of theirparticular circumstances, tosuitable insurance providersoffering appropriate cover, forexample older travellers. BIBAsFind a Broker service alreadyhelps more than 400,000customers a year to accessinsurance protection.
We are working with thegovernment to achieve a newagreement for signposting aspart of the introduction of theEquality Act 2010.
We are calling for thegovernments signpostingservice to be rolled out further.
Suitable insurance Commoditisation of insurance
has led to an unhealthy focuson price and a deterioration inthe amount of advice sought bycustomers to obtain suitable cover.Our members can provide the
necessary advice to ensure thatconsumers are suitably protected.
Insurance policies are complexcontracts and without advicethere can be gaps in protection, forexample a significant number oflandlords are understood to havea standard home insurance policywhen in fact, this policy would beinvalid as a commercial policy isrequired.
We are calling for informationand improved financialeducation to be availablethrough governmentdepartments, regulators andconsumer bodies regarding
access to and the benefitsof insurance advice from ourmembers and promoting thevalue of suitable insuranceprotection.
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Fairer premiums forconsumersWe believe that a consumerspremium should be based on afair assessment of the real risk thatthey pose.
We will continue to work with thegovernment to look at improvingthe cost of motor insurance.This will include issues aroundbodily injury claims, fraud,uninsured driving, young driversand clarity of cover.
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FraudThe average cost of insurancefraud to every innocent customer is50 per policy per annum. 4
We will work with governmentand anti-fraud organisations
including the InsuranceFraud Bureau to reducemisrepresentation andapplication fraud and will seekgreater access to the DVLAdriver licence database toreduce motor insurance fraud.
Ensuring online tradingdelivers the right results forcustomers
We believe it is important thatconsumers buying insurance overthe internet are aware of the keyfacts and significant exclusionsthat apply to their policy and thatwhere prices are reported bya website they must reflect theproduct criteria searched for.
We will continue our campaignto ensure customers buyingon the internet achieve clarity,certainty and appropriateinsurance cover.
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Attributed to:4Insurance Fraud Bureau
Accessing insurance
case StudyMrs Alcock and her husband(76) were planning a holiday toTenerife. However they werefinding it very difficult to get travelinsurance that would cover MrAlcock due to a heart attack hehad in 1999. Mrs Alcocks currentinsurer had recently changedtheir policy and were now nolonger able to cover Mr Alcocksheart condition. They offeredthem insurance but this wouldexclude heart conditions. MrsAlcock approached a number ofother insurance companies andagain all were able to offer coverto them but not for his medicalconditions. Mrs Alcock wasthen recommended to contactour Find a Broker helpline who
put her through to a specialistbroker. The insurance broker wasable to cover Mr Alcocks travelinsurance including his medicalconditions.
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Empowering UKbusinesses
Having the right riskmanagement and insuranceprogramme provides securityand peace of mind, enablingbusinesses to protect assetsand liabilities and continue totrade if they suffer loss.
Brokers throughout the UK areable to provide these solutionsfor their clients and in doing so,businesses are protected andare able to continue to developand grow.
Business continuityBIBA research undertakenwith the Cabinet Office showsthat 62%1of respondents saidthat those organisations witha business continuity plan willbenefit from doors opening to newinsurance markets, a premiumdiscount or a reduced excess.
We will work with the
government to promotethe benefits that resiliencemeasures and businessplanning can provide to helpsupport the growth of businessin the UK.
Business interruptionThe riots during 2011 highlightedthe importance to businesses ofhaving comprehensive businessinterruption insurance. Brokers areable to advise on the correct coverfor businesses ensuring that they
are able to continue to operate andare supported in times of need.
Business interruption iscomplex but essential and weare calling on the governmentand business organisationsto raise awareness of thisimportant area of cover.
Fair treatment of businessesIt is unfair for financial organisationsor lenders to pressurise customersinto purchasing insurancethrough their facility, restricting thecustomers freedom to choose andaccess to independent advice.
The practices of conditional
lending, tying and bundling mustbe appropriately regulated andenforced to protect customers.
Attributed to:5 Debarati Guha-Sapir, Centre for Research
on the Epidemiology of Disasters, Brussels6 Cunningham Lindsay1BIBA
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UnderinsuranceDuring the economic downturnmany businesses have beencutting back on their insurancecover. Loss adjuster CunninghamLindsay says that out of a sampleof portfolios that they valued
they discovered underinsuranceranging from 50% to 70%.6
57% of brokers have seenreductions in levels of insuranceprotection for personal linescustomers and 67% of brokers hadseen commercial customers reducetheir level of insurance protection.1
We will be raising awareness ofthe consequences of not havingsuitable insurance cover andlook to help businesses so thatthey are protected inthe event of a claim.
CatastrophesThe UK has the highest economicloss from flood catastrophes inEurope.5The government holdsthe responsibility in ensuringprevention (e.g. through flooddefences). We believe that not
enough is being done to help putin place the preventative measuresthat will help develop a moreresilient society.
We will continue to work withgovernment and our membersto provide sustainable productsto strengthen the resilience of oursociety, maintaining the coveragefor catastrophe risk insurance particularly floods and stormsin conjunction with governmentaction on prevention.
We are calling for increasedcooperation in regard toflooding between the public andprivate sectors to help protect
property owners, businessgrowth and development inthe UK.
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Empoweringthe insurance sector
Reform of the UK regulatoryarchitectureGeneral insurance brokerscontribute 1% of GDP to the UKeconomy and provide solutionsto managing risks.
Our members recognisethe need for regulation. Tofacilitate innovation and growthwe are calling for a moreappropriate, proportionateand cost effective approachto regulation with specificregulatory consideration forgeneral insurance brokers andintermediaries.
The protection of client money We believe the protection of client
money is paramount.
We will work with the regulatorto build upon existing clientmoney requirements with a more
universal approach to premiumhandling. We are aiming to givegreater confidence to clients, themarket and the regulator duringthe economic crisis.
Direct and indirect regulatory costsof insurance intermediaries in the UK and Europe
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0%
Sweden
France
Spain
Germany
Denmark
Netherlands
Switzerland
Finland
Portugal
NorwayItaly
Ireland UK
Regulatorycostsasaproport
ionof
generalInsuranceIntermediationrevenue
Indirect Cost
Direct Cost
Source: Future regulation for insurance
brokers/Charles Rivers Associates
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Attributed to: BIBA
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Reform of the FinancialServices CompensationScheme (FSCS)We support customercompensation. The provision forcompensation to customers playsan important part in increasing
public confidence in financialservices. However, the currentunfair funding system of the FSCShas led to a 50 fold increase infees during the last three years forinsurance brokers.1
These inequitable increases,which are stifling growth have beencaused by credit intermediarieswho have mis-sold paymentprotection insurance andbeen unable to pay customercompensation. This has led toincreased calls on the FSCSinsurance intermediary sub-class,which our professional insurancebrokers share with around 10,000secondary sellers of insurance such
as doctors, dentists, motor traders,vets and credit intermediaries.
We will call on the FSA to separateprofessional insurance brokersfrom the secondary sellers ofinsurance and to end the practiceof cross-subsidies as part of itsreview of the Financial ServicesCompensation Scheme duringthe first half of 2012.
Case Study/example1
A member broker of BIBA, with 330staff, paid the following FSCS fees:
2008 - 3,0002009 - 16,000
2010 - 125,000 2011 - 150,000
Regulation by the new FinancialConduct Authority (FCA)
This is an opportunity for betterregulation. Regulation has a majorinfluence on our profession and wehave long campaigned for moreappropriate and proportionatelevels of supervision. We are astrong supporter of the principle ofbetter regulation and will continueto work to achieve this, includingefforts to reduce unnecessary,unfair or inappropriate regulation.
The cost of regulation toinsurance brokers in the UK isthree times higher than the nextmost expensive European state,Ireland. Independent research
commissioned by BIBA identifiedthat brokers only pose a low risk tothe regulators objectives.
Given the low risk posed byinsurance brokers, we arecalling for the new regulator, theFinancial Conduct Authorityto institute a revised regimethat better reflects this lowlevel of risk and does notimpose unnecessary costs anddisproportionate supervisionthat stifles growth in our sector.
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Professional indemnity (PI)insurancePI cover provides an invaluablesafety net to professionals. OurPI initiative is leading reform inthis important area for brokersto ensure better protection for
members and their customers.We will continue the initiative toensure our members can obtainoptimum protection for theirliability risks.
Adequate resources It is our view that if the regulator
requires firms to hold more capital itshould be on the basis of consultedupon and costed rules, rather thanthe judgmental approach thatcurrently exists. Improvement to
this could release capital to assistgrowth. This by the back doorapproach to regulation withoutconsultation is disproportionateand must be reviewed.
We are calling for a reviewof the regulators thresholdcondition 4 adequateresources to improve clarityand support growth.
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Working with insurers It is important for insurance brokers
and insurance companies to havea good working relationship andfor customers to receive a positiveoutcome.
Our General InsuranceBrokers Committee will workconstructively with insurers todeal with internal market issuesto create a more effective andefficient outcome for clients.
We will help by providing an issueregister containing details ofthe points under discussion, toensure clarity and the standardsof professionalism are upheld.
One key piece of work withinthis initiative will be to ensurethat the new EmployersLiability Database developed byELTO (The Employers LiabilityTracing Office) is incorporated
as a more robust vehicle for thetracing of old employers liabilitypolicies in order that victimsof long-tail disease claims canreceive compensation.
Reform of insurance lawWe support the ConsumerInsurance (Disclosure andRepresentations) Bill and its moveto create greater confidence in theinsurance industry.
We will work with the LawCommission to progress this billand to develop other proposedchanges to insurance lawaffecting business.
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Empowering theUK to trade worldwide
We will work with thegovernment to support thecompetitiveness and growthof the UK insurance marketfor internationally tradedinsurance. Making sure the UKremains at the forefront of the
international insurance market.
Europe We play an influential role in
promoting and protecting ourmembers interests in Europe.We want appropriate Europeanregulations and for them to beimplemented proportionately.
We are currently faced with aconsiderable number of directivesand proposals.
We will continue to play a fullpart within our European brokerfederation BIPAR. We will alsoengage proactively with the UKGovernment and the European
Commission to ensure the mostappropriate outcomes.
The London and internationalmarket
The London insurance marketis the jewel in the crown of theUKs financial services sector.
The London market accountedfor around 36.9 billion in gross
premiums in 2010,7 almost allof which is produced by ourprofessional insurance brokermembers, making it the worldsbiggest market for internationallytraded insurance. Our LondonMarket Region Committeesupports our view that we needthe UK to remain an economicallyviable place to do business and theLondon insurance markets pre-eminence undiminished.
We will work with thegovernment and other bodies toensure that the regulatory, fiscaland legislative environmentdoes not affect adversely ourmembers competitiveness.
We will raise awareness aboutbrokers activities and theirimportance to the UK economy.We will also work to identify andreduce barriers to growth for UKbrokers.
Attributed to:7 TheCityUK
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Trade Credit Insurance We will continue to champion the
growth of trade credit insuranceto assist UK and internationalsales particularly following thedevelopment with UK ExportFinance (formerly called the Export
Credits Guarantee Department)which now enables customers toaccess cover through thebroking sector.
Revision of the EU InsuranceMediation Directive (IMD)
The IMD is the European directivethat sets certain rules for insurancebrokers in the UK which areimplemented by the regulatorthe FSA. The IMD is currently
being revised by the EuropeanCommission and we want to seeits broad scope maintained. It isimportant that travel agents andcomparison websites are included,thus ensuring customers receive aconsistent and appropriate level ofprotection wherever they buytheir insurance.
Reform is also needed to thecurrent regulatory unlevel playingfield so that customers have accessto the same suite of disclosureswherever they buy their insurance.We support the early views of theEuropean Commission in its draftconsultation and public hearing,including that remuneration should
be disclosed upon request. Webelieve that addressing theseissues will help to provide a levelplaying field for insurance brokersand their customers in the UKand Europe.
We call on decision makerswithin the EuropeanCommission to provide a levelplaying field for insurancebrokers and their customersthrough the reform of the EUInsurance Mediation Direction.
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The various directives and their revisions that willhave an impact upon insurance brokers
Gender Equality
MiFiD2
Insurance MediationDirective (IMD)
Insurance Guarantee Schemes
Investor compensation scheme
Prof. QualificationsCorporate Governance
Solvency IIUcits
PRIPSInsurance Intermediary
Sanctions
Credit agreements relating toresidential property
+New Regulatoryinstruments/procedures/ESAs
ESAs
Contract Law
IORPADR
VAT,(FAT),FTT,IPT
Public ProcurementConsumer Rights
E-Commerce Directive, Anti Money Laundering,Collective redness, Distance selling
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C
ontacts
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OUR EXECUTIVES
Eric Galbraith
020 7397 0201
Barbara Bradshaw
01933 410 [email protected]
Lindsay Campbell
020 7397 0221
Leighann Forsyth
020 7397 0223
Steve Foulsham
020 7397 [email protected]
Graeme Trudgill
020 7397 0218
Steve White
020 7397 0222
Kirsty Wingrove
020 7397 0224
OUR STAFF
COMMUNICATIONS
Becky Pledge
020 7397 0231
CORPORATE AFFAIRSNicola Martin
020 7397 0200
MEMBERSHIP
Sunel Victor
020 7397 0205
REGULATION
Vannessa Young
020 7397 [email protected]
TECHNICAL SERVICES
Doreen Campbell
020 7397 0219
Ann Peel
01933 410 003
CONFERENCE
Katie Reay
020 7397 0248
ACCOUNTS
Gurmukh Shehri
020 7397 0214
Joelle Etienne
020 7397 0249
Sharon Beckett
01933 410 003
ADMINISTRATION
Barbara Johnston
01933 410 003
Alison Bradshaw
01933 410 033
Mary Simmonds
01933 410 003
OUR REGIONS
SCOTLAND AND
NORTHERN IRELAND
Clive Hurn
07584 708558
YORKSHIRE
AND NORTHERN
Ian Raper
07584 708562
MERSEYSIDE, NORTH
WALES, WEST CHESHIRE &
ISLE OF MAN AND GREATER
MANCHESTER
Bob Nicholls
07584 [email protected]
EAST MIDLANDS
AND ANGLIA
Kay Doyle
07584 708561
WEST MIDLANDS
Sue Dimmock
07584 708594
WEST OF ENGLAND
AND SOUTH WALES
Barry Blakley
07584 708559
CENTRAL AND SOUTH EAST
Diane Smyllie
07584 708556
LONDON MARKET REGIONVannessa Young
020 7397 0233
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A
U
H
S
M
D
G
F
N
E
J
I
T
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Regions
A Scotland
D Yorkshire and Northern
E Merseyside, North Wales,West Cheshire and Isle of Man
F Greater Manchester
G East Midlands
H West Midlands
I West of England
J South Wales
M Central
N Anglia
S London Market
T South East
U Northern Ireland
B
IBAregions
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British Insurance Brokers Association8th FloorJohn Stow House18 Bevis MarksLondonEC3A 7JB
Find a Broker helpline: 0870 950 1790Member Helpline: 0844 77 00 266Fax: 020 7626 [email protected]
Graeme TrudgillHead of Corporate Affairs020 7397 [email protected]
Leighann ForsythHead of Communications020 7397 [email protected]
Eric GalbraithChief Executive
020 7397 [email protected]
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