The British Insurance Brokers' Association (BIBA) has launched its 2014 Manifesto (available here) in UK Parliament. BIBA addresses its campaigning issues in three ways: delivering for consumers; businesses; and the insurance industry. The Manifesto’s key aims include:
- Delivering access to suitable insurance protection
- Delivering a competitive regulatory system
- Improving public understanding and the role of the insurance industry
- Helping SMEs
- Creating a level playing field for distribution
- Tracking and measuring insurance premiums
Of particular concern to BIBA, is the cost of brokers’ regulation. Research carried out by London Economics revealed that of 23 leading nations, the UK was the most expensive direct regulatory regime, costing more than five times that of our main competitors in New York and Japan. The research carried out for BIBA showed that:
- the cost of regulation for small brokers (with less than £1 million in revenue) has increased from 3% three years ago to 4% of income now; and
- on average the UK has the most expensive direct cost of regulation in the world, with large brokers paying fourteen times the global average.
BIBA argues that the disproportionate costs and red tape in the UK have led large BIBA members to focus their resources and investment overseas. According to BIBA, large brokers have come to the conclusion that it is no longer commercially viable for them to operate in some UK markets. As a result, competition in these markets has reduced, contrary to the FCA’s objective.
The full cost of regulation report and the indirect regulatory cost comparisons will be published in the spring.