New regulations could cut wholesale brokers’ commission
In an Interview with Third Bridge Forum, the specialist broke down the average wholesale broker commission and its split between wholesale and retail brokers. The specialist told us once additional fees are added, wholesale brokers can make 35-50% commission, but this is “not in the interest” of consumers.
The specialist said that if new regulations are introduced to “forbid” additional fees, wholesale brokers could bypass proximity brokers to protect their commission – potentially causing a decline in the latter. The specialist highlighted one French insurance company that is already “preparing” for the new regulations in the event they are introduced.
Despite the potential drop in commission, the specialist said April could boost organic growth by entering the pet insurance market. The specialist told us the market is growing at a “very high rate”, with current coverage at approximately 15% in France. Mortgage insurance was also mentioned as a potential – albeit slower – growth avenue, as was construction insurance, an area where April already has a “strong” presence. These opportunities and its current position in motor and health insurance for self-employed customers should see April surpass its 2023 strategic targets, we were told.
Having “dramatically” reduced its international presence under former president Emmanual Morandini, the specialist said April now plans to increase its operations abroad. The specialist also expects April to acquire smaller brokers as it attempts to increase inorganic growth. However, they said this could be challenging because the current French brokerage market is in a “consolidation phase”.
April itself could become an acquisition target, we were told, with the specialist highlighting two insurance companies which could potentially help the company “grow further” in specialised areas.
To access all the human insights in Third Bridge Forum’s April Group – French wholesale insurance brokerage & gwp growth outlook Interview, click here to view the full transcript.
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