BIBA latest research demonstrates UK brokers have the most expensive regulatory regime
14th May 2014
The British Insurance Brokers’ Association (BIBA) has revealed research demonstrating that insurance brokers in the UK have the most expensive regulatory regime in the world, with regulatory fees and levies costing more than five times that of those in New York, Japan, France and Germany.
The research shows that the cost of regulation for small brokers has increased from 3% three years ago to 4% of income now and that large brokers pay fourteen times the global average cost in comparison to other nations.
Steve White, BIBA’s Chief Executive, commented: “Having the most expensive fees and levies in the world puts UK brokers at a disadvantage and is disproportionate to the low risks that they pose to the regulator’s objectives. Our Manifesto outlines our calls for action to tackle this. We will work with the Financial Conduct Authority on the review of its funding to find a more equitable system. We will also continue to fight for a fairer separate sub-class within the Financial Services Compensation Scheme (FSCS) for pure insurance brokers.”
Graeme Trudgill, BIBA’s Executive Director, stated: “This new BIBA/ London Economics’ research contains a detailed table that shows in the cold light of day just how out of step the direct cost of regulation is for UK insurance brokers compared to our European and global competitors. We have recently met with Martin Wheatley the FCA’s CEO to discuss this report and how both the direct and indirect cost of regulation for brokers can be more proportionate to the limited risks they pose.
“We were pleased with the near 30% reduction in this year’s FSCS levy but the model remains flawed. The indirect cost of internal compliance costs continues to be of concern to members. We believe in good quality appropriate regulation, but at a time when we are working with Government on the UK Insurance Growth Action Plan, this disproportionate approach is a significant barrier to growth.”
Notes to editors
1. Click here for full report
2. For further information please contact:
BIBA press office:
Leighann Forsyth, Head of Communications
07917 738 721
3. About British Insurance Brokers' Association
The British Insurance Brokers' Association (BIBA) is the UK's leading general insurance intermediary organisation representing the interests of insurance brokers, intermediaries and their customers.
BIBA membership includes just under 2,000 regulated firms having merged with the Institute of Insurance Brokers (IIB) in November 2011.
General insurance brokers contribute 1% of GDP to the UK economy and BIBA brokers employ more than 100,000 staff.
53% of all general insurance is sold by an insurance broker and they arrange 81% of all commercial insurance business.
Insurance brokers put the client’s interests first, providing advice, access to suitable insurance protection and risk management.
BIBA helps more than 400,000 people a year to access insurance protection through it’s Find a Broker service, both online and via the telephone.
BIBA is the voice of the industry advising members, the regulators, consumer bodies and other stakeholders on key insurance issues. BIBA provides unique schemes and facilities, technical advice, guidance on regulation and business support and is helping to raise, and maintain, industry standards.