Podcast
Questions and Answers
Which type of insurance product is least likely to be handled by brokers?
Which type of insurance product is least likely to be handled by brokers?
In the context of insurance brokerages, which type of firm primarily relies on mergers and acquisitions for growth?
In the context of insurance brokerages, which type of firm primarily relies on mergers and acquisitions for growth?
What is the primary function of a wholesale broker in the insurance market?
What is the primary function of a wholesale broker in the insurance market?
For a UK-based company operating factories across six countries, which type of broker is recommended?
For a UK-based company operating factories across six countries, which type of broker is recommended?
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What distinguishes a retail broker from a wholesale broker in the insurance sector?
What distinguishes a retail broker from a wholesale broker in the insurance sector?
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Which characteristic is typical of a consolidator broker?
Which characteristic is typical of a consolidator broker?
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Which type of broker is most likely to manage complex specialty risks?
Which type of broker is most likely to manage complex specialty risks?
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Which option best describes the primary market interaction of wholesale brokers?
Which option best describes the primary market interaction of wholesale brokers?
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What relationship exists between the complexity of a risk and the likelihood of it being handled by a broker?
What relationship exists between the complexity of a risk and the likelihood of it being handled by a broker?
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What percentage of the household market do brokers hold?
What percentage of the household market do brokers hold?
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What is the most accurate statement regarding the majority of insurance broking firms in terms of employee count?
What is the most accurate statement regarding the majority of insurance broking firms in terms of employee count?
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What advantage do insurers primarily gain from using insurance brokers?
What advantage do insurers primarily gain from using insurance brokers?
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In which year did BIBA merge with the Institute of Insurance Brokers?
In which year did BIBA merge with the Institute of Insurance Brokers?
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What trend has been prevalent in the personal lines insurance market regarding brokers?
What trend has been prevalent in the personal lines insurance market regarding brokers?
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What has been the impact of market consolidation on the number of insurance broking firms?
What has been the impact of market consolidation on the number of insurance broking firms?
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Which statement is true about the value that consumers place on brokers?
Which statement is true about the value that consumers place on brokers?
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What is the primary distinguishing feature of an insurance broker compared to other intermediaries?
What is the primary distinguishing feature of an insurance broker compared to other intermediaries?
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What percentage of commercial insurance business in the UK is arranged through brokers?
What percentage of commercial insurance business in the UK is arranged through brokers?
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Since what year have insurance broking firms been regulated by the FCA?
Since what year have insurance broking firms been regulated by the FCA?
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What is the main purpose of LIIBA in the London insurance market?
What is the main purpose of LIIBA in the London insurance market?
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What is the significance of the percentage of commercial insurance arranged through brokers?
What is the significance of the percentage of commercial insurance arranged through brokers?
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How did regulation of insurance brokers change in 2013?
How did regulation of insurance brokers change in 2013?
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What role do insurance brokers play in the commercial insurance sector?
What role do insurance brokers play in the commercial insurance sector?
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What was the role of the FSA in the context of insurance brokers before 2013?
What was the role of the FSA in the context of insurance brokers before 2013?
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Study Notes
Insurance Broking
- Complexity of Risk: Complex risks are more likely to be handled by a broker due to the need for specialized knowledge and understanding of policy terms.
- Personal Lines Insurance: Brokers hold approximately 20% of the household insurance market.
- Current State of UK Insurance Broking Market: The majority of insurance broking firms employ less than five people.
- Benefits to Insurers from Brokers: Insurers gain access to technical expertise from brokers for explaining complex products to clients, reducing misunderstandings during claims.
The Role of Brokers
- Merger of BIBA and the Institute of Insurance Brokers: The two organizations merged in 2011, further solidifying the influence of insurance brokers in the UK market.
- Least Likely Insurance Type Handled by Brokers: Standard travel insurance is less likely to be handled by brokers due to its straightforward nature.
Types of Brokers
- Medium-sized Broker Acquisitions: Consolidators are most likely to acquire medium-sized brokers due to their focus on mergers and acquisitions to grow their business.
- Wholesale Broker Function: Wholesale brokers act as intermediaries between retail brokers and insurers, facilitating access to specific markets and policy coverage.
- Brokers for Global Operations: Global firms are best suited for companies operating in multiple countries due to their ability to manage international insurance programs.
- Distinction Between Retail and Wholesale Brokers: The primary distinction lies in the client relationship. Retail brokers act as agents for their clients, while wholesale brokers act as intermediaries between retail brokers and insurers.
General Insurance Broker Trends & Regulatory Landscape
- Brokers in Commercial Insurance: Brokers handle 87% of all commercial insurance business in the UK.
- Insurance Broking Regulation: The Financial Conduct Authority (FCA) regulates insurance broking firms since 2013, following the transition from the Financial Services Authority (FSA) regulation (2005-2013).
- LIIBA's Purpose in the London Insurance Market: The London International Insurance Brokers' Association (LIIBA) focuses on maintaining London as a preferred location for international insurance business.
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Description
Explore the intricate world of insurance broking, including the complexity of risks managed by brokers, the current state of the UK market, and the benefits they provide to insurers. Learn about the merger of key organizations and the types of insurance most commonly handled. Perfect for anyone looking to understand the crucial role of brokers in the insurance industry.
