The British Insurance Brokers' Association has launched its 2014 manifesto. Graeme Trudgill outlines its campaign targets
After months of canvassing brokers' views on the issues that matter most to them, the British Insurance Brokers' Association (BIBA) launched its 2014 manifesto in the Houses of Parliament, at a reception hosted by Jonathan Evans MP, to an audience of ministers, MPs, civil servants, brokers, insurers and the regulator.
BIBA's manifesto is its calling card to engage relevant stakeholders. It has spent the last few months travelling around the UK in extensive consultation with members ensuring it is representing brokers on the issues that most affect their businesses.
This year there are 16 campaigning issues in three distinct sections: consumers, businesses and the insurance industry.
As the countdown to the UK General Election in May next year begins, the government has understandably identified 2014 as a year in which it will deliver on pledges and commitments made to the electorate.
With that delivery theme in mind, BIBA has set out where more can be done to deliver for consumers and their families, support businesses that provide vital employment and protect and promote the insurance industry itself - which plays such a critical role in driving growth.
The burden of regulation
One of the ongoing issues that remains high on the agenda is the behemoth of overly costly and invasive regulation. Brokers pose a low risk to the Financial Conduct Authority's (FCA) statutory objectives - there is no issue of systemic risk, brokers do not fund claims and client money rules are very protective of the client - so there is insufficient justification for the UK to have a regulator that costs brokers 14 times the international average of 26 leading nations.
This figure comes from some new research BIBA has commissioned from London Economics, which has also identified that the cost of regulation in the UK market is five-fold that of our leading international competitors such as Japan, New York, France and Germany.
The research showed the cost of regulation for small brokers has increased from 3% of income three years ago to 4% now. When there are so many pressures on small businesses already, this is a bitter pill to swallow and unnecessarily so.
Additional member research has revealed that the Financial Services Compensation Scheme's (FSCS) fees are negatively impacting brokers, with 53% stating they have either delayed or cut investment and 40% reporting a decline in expansion.
BIBA is calling for a review of the FSCS model to find a more equitable system and will continue to fight for a fairer separate sub-class within the FSCS for pure insurance brokers.
Martin Wheatley, chief executive of the FCA, made a commitment to proportionate regulation for brokers at BIBA's annual conference in May 2013. However, the broking sector has seen ten different thematic reviews come out of the new regulator already, and we know of more in the pipeline.
It is a priority for BIBA in 2014 to pin down the regulator on exactly how we can work with it to create a better balanced, more equitable and proportionate system. We want to help the FCA deliver on its promise to the broking community.
