SchemeServe has released the latest results of its bi-annual Index, tracking trends and performance of the insurance schemes market. The data, covering the last six-month period from the start of April 2022 to October 2022, identifies a number of trends in different schemes across the period and compared to the same period last year during the pandemic.
Overall the figures show a stark drop across the board on most schemes at renewal and for total commission earnings.
Cyber: Cyber is yet again the standout scheme, but this time negatively. The data shows a marked drop at renewal and significant drop in commission earnings. In previous Indices Cyber has been one of the best performing schemes since the start of the pandemic, outpacing many other schemes and growing in volume by nearly 500% since the start of the pandemic. In the last six months however cyber volumes fell 24% and total commission income fell 28%. If we compare that to September 2021, Cyber has seen the biggest fall of all schemes falling 49% in volumes and 65% in total commissions compared to figures from last September.
Combined Liability: The second highest earning scheme for brokers back in March 2022 was Combined Liability which had shown a 37% increase in commission earning. Just 6 months later volumes have fallen 24% and commission earnings 26%.
Caravan/Trailer: Volumes and commission income have continued to slide from their height during the pandemic staycation frenzy. In the last six months volumes have dropped another 49% and commission income dropped 37% – the biggest fall across all lines in the last 6 months.
Adam Bishop, CEO of SchemeServe, comments: “In our last index in April we were starting to see a number of high growth schemes stalling and figures starting to fall and this decline has gathered pace in the last 6 months across many lines including Caravan, Cyber and Pubs and Clubs. There could be many reasons for this – different for each product, but certain headwinds including the macro-economic environment and hard restrictive market with MGAs losing capacity in certain lines, is likely to be a strong contributing factor.
Could we be seeing early indicators of a recession stating to bite? It is interesting to see some areas of positivity however, perhaps indicating opportunity for growth such as Commercial Combined and Contractors All Risks which have shown some improvement in the last 6 months. Our next set of data due out at the end of March 2023 will be interesting – we’ll be tracking movements closely for our MGA and broker clients.”
Contractors All Risks: One of the best performers in 2019/20, the numbers fell dramatically at the end of 2020 and beginning of 2021. Since the start of the pandemic commission earnings fell 84% up until April this year. In the last six months however, volumes are up 5% and commissions up 10% – small movements but standout amongst other falling lines. With the cost of contractors and materials increasing in a still buoyant housing market, this has an impact too in increased premiums and could therefore be another reason for slightly higher commissions.
Pubs & Clubs: These schemes have continued to slide in the last six months. Pubs and Clubs are notoriously a restricted market and in the current hard market conditions commissions have been driven down 36% in the last 6 months despite a 38% increase in volumes in September this year compared with September last year.
Motor Trade: Volumes have increased 20% in September compared to the same period last year, but despite this commission earnings were 14% down. In the last 6 months volumes have risen 10% and commissions are down 2%, again illustrating the squeeze on broker commissions in the current market.
The data comes from the SchemeServe Premium Index which is a bi-annual pulse check on the Schemes market. An insurtech with a 20-year heritage, SchemeServe now works with most of the leading schemes brokers and insurers. It designs and operates schemes for insurers and delegated authority brokers and MGAs via its cloud-based platform. It offers an agile platform allowing them to get schemes up and running in a matter of days and make any updates (rate changes, changes from regulatory demands, or launch new products, for example) quickly and securely.
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