Risk management association Airmic and its members are working with the UK’s Financial Conduct Authority (FCA) on its market study into competition in wholesale insurance broking, which was announced late last year.
The association’s CEO, John Ludlow, told members that Airmic supports the review and will work with the FCA to put forward the views of commercial insurance buyers.
He said members generally form positive relationships with brokers, but added that buyers offer a unique perspective. Potential conflicts of interest have given rise to more concern in recent years, he added.
“Ultimately, the competitiveness, reputation and diversity of the market are the key tests of the system and our members are best placed to shine a light on the current state of play,” Mr Ludlow said.
The study promises to examine competition issues in the sector, including how brokers compete for business, conflicts of interest and broker conduct.
In December, Mr Ludlow said Commercial Risk Europe that the benefits of the review would be worthwhile. “All industries should be open and welcome a fresh pair of eyes every now and then. This may be difficult and challenging in the short term, but it is good for the long-term health of the market,” he said.
Airmic said it looked forward to greater transparency in the sector, in particular on how conflicts of interest are managed.
He added that commercial insurance buyers should not rely on regulation alone and are advised to take a proactive approach in their relationships with brokers to be better informed, in particular SMEs.
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