<p><strong>Speaker 0</strong>: <span>Graham Gill is executive director at Bieber, and he joins me Now, Graham, First of all, how are you at Bieber? Looking to influence policy and regulation for brokers, Not just for 2023 but in the years to come.</span></p> <p><strong>Speaker 1</strong>: <span>Well, there's ever such a lot to do as always working, uh, for Bieber. But what we do is we put together all of the members issues in this, our our manifesto, our document that</span></p> <p><strong>Speaker 1</strong>: <span>we really used to take round to to all of the politicians, all of the stakeholders, the regulator to give an example. Right now, we have the financial services and markets bill going through parliament. So we've been incredibly involved in that. A recent insurance minister described that as the, uh, a once in a generation opportunity for us to get change of regulation because if you think back, it was back, uh, the Financial Services and Markets bill in 2000, which came into force in December 2001 which created the F S A.</span></p> <p><strong>Speaker 1</strong>: <span>So here we are. Now we've Brexit, and we've got an opportunity to to shape the regulation of the future. So for us, we've been engaged with all elements of the progress of the bill through the Lord. So we've been writing a briefing paper for every stage. There's been about a dozen stages in the Lords, and when it finishes that, it comes back to the Commons and what we want. There is something that we've been asking for,</span></p> <p><strong>Speaker 1</strong>: <span>uh, in our manifesto since 2018, and that's for the regulator to have a, uh, an objective on growth and competitiveness. So any rules and regs they come out with they need to think about is that going to affect growth or competition? And we think that's a really healthy thing. The F S a used to have that. But of course, we're 10 years on and the F C A has never had that. So we're really keen that that, uh, does come into force. We think it it will stay in the bill. It's looking good.</span></p> <p><strong>Speaker 1</strong>: <span>And then the next thing we want from that bill is for there to be some accountability on the regulators. So who, um, you know who marks the regulator's homework? At the moment, it seems to be themselves. So how can we make sure</span></p> <p><strong>Speaker 1</strong>: <span>that they are held account. You know, Should there be a an office of regulatory accountability? Should there be a particular select committee or parliamentary committee that can keep that regulator in check to make sure the regulation they come out with is is healthy and good for industry as well as, of course, giving that important client protection as well? So</span></p> <p><strong>Speaker 1</strong>: <span>we get very engaged in all not just the progress of the bill, but with the bill team with the insurance minister with the shadow team. Um, you know, so that the Labour Party, uh, so that everybody involved knows the member's views, what we think is good and what we think is not so good and could be better and more proportionate.</span></p> <p><strong>Speaker 0</strong>: <span>And on that point, given the fact that often not always, um, today's opposition could be tomorrow's government. How much time are you spending with the Labour Party and the people who may be the movers and shakers in two or three years</span></p> <p><strong>Speaker 1</strong>: <span>time? Well, we always keep, uh, relations good with the Labour Party. We go to their annual conference, for example. But more recently,</span></p> <p><strong>Speaker 1</strong>: <span>uh, we've just met with the Shadow Business Minister. We, uh, have also been giving our, uh, briefing papers and met with, uh, Juli Sadiq, the the shadow insurance minister. So it's really important that we are neutral and have relations with all of the political parties so that whoever's in power, they understand. You know, the brokers are the they're the ones helping the customers with the good guys and, um, and to work with us to create a marketplace that's good for people to trade and good for people to buy insurance. And and they have trust in what they're buying</span></p> <p><strong>Speaker 0</strong>: <span>in the round. Would you say the regulatory backdrop is getting tougher for brokers? Bit easier, same as it ever was.</span></p> <p><strong>Speaker 1</strong>: <span>It's as tough as it's ever been. In my view, Um, we commission London Economics to do some work every three years to look at. What are the changes? How are the members seeing things? How do we compare to the rest of the world? And right now, um, the cost, uh, to a broker,</span></p> <p><strong>Speaker 1</strong>: <span>uh, for compliance with regulation is about 8% of their fees and commissions. That's averaged out across small, medium, large, huge brokers. So 8% is quite a a big chunk of of a broker's, uh, earnings and the, you know, the specifics of it. Things like fair value assessments on regulation have been very, very onerous. So for us, um, it's difficult. We don't think we're a high risk sector. We actually think we're a very low risk sector. You don't very often hear of</span></p> <p><strong>Speaker 1</strong>: <span>any concerns about, um, insurance brokers more generally. And then you look at other areas in financial services, uh, who who are causing issues. So for us, we just want something that's proportionate coming out of the regulator. Um, but it it is proving harder and harder and more onerous and that the regulatory teams within brokers are growing by the day.</span></p> <p><strong>Speaker 0</strong>: <span>Well, given that I mean, we were hearing about consumer duty fair value assessments coming out, Um, are they formalising What brokers already do? Or is there something a bit more radical at the heart of what's coming out from the F. C A.</span></p> <p><strong>Speaker 1</strong>: <span>So I think with the consumer duty that I suppose recognises that brokers are already the agent of the client. We have been under agency law, um, since the Doomsday book. So we we are the agent of the client we have those clients best interests at heart. And so really, I think what they have done in in formalising it into regulation</span></p> <p><strong>Speaker 1</strong>: <span>is put requirements about, um, the paperwork, the the reporting, the making Sure the fair value assessments are in place for every single case. But what you have to think about from the broker's perspective is that some some brokers would, Well, most brokers probably have 70 80</span></p> <p><strong>Speaker 1</strong>: <span>agencies. Some have a lot more than that. And for each agency, you probably got maybe 20 different products that you deal with for each insurer. So you start multiplying these up, and some brokers have had to do thousands of fair value assessments, you know, and that's a huge amount of work. It's taking</span></p> <p><strong>Speaker 1</strong>: <span>resource of the front line, diverting it to the back office. You're not able to serve your clients as much on the front end. You're not able to focus on those new insure tech innovations. Uh, and you are spending the whole time beavering away at the paperwork to evidence compliance. And I think from our perspective we understand why fair value assessments are there. They they make sense. You want to make sure a client has a product that's suitable, but the the actual operation of it and the delivery of it of of evidencing fair value assessments is is incredibly onerous.</span></p> <p><strong>Speaker 1</strong>: <span>So from our perspective, what we think would be helpful is that if the F c A looked to perhaps consider for advice sales that you don't actually need to have a full f e A. Because the broker is doing a suitability assessment, they're doing a demands and needs. And if you're doing that, you're effectively doing the same thing anyway. So for advice, sales for, you know, large commercial clients, why do you have to do all the f e A.</span></p> <p><strong>Speaker 1</strong>: <span>So, um, in our view, uh, yes, have them for, uh, for the non advised, but perhaps not the advise. So we we keep putting ideas to the regulator. We're trying to be constructive with our suggestions so that we can have more proportionate and smarter regulation for everyone. At the end of the day,</span></p> <p><strong>Speaker 0</strong>: <span>if that doesn't happen on F e A s, do you think there's a chance that brokers will just say, Well, I'll just link to fewer potential insurers? Yeah, there'll be a concentration That's the only way I can keep on top of all this paperwork. We</span></p> <p><strong>Speaker 1</strong>: <span>don't want to see that, Um,</span></p> <p><strong>Speaker 0</strong>: <span>it will happen. But is that a consequence?</span></p> <p><strong>Speaker 1</strong>: <span>I think</span></p> <p><strong>Speaker 1</strong>: <span>it's important that the broker can always offer the customer choice and whether that's, uh, a local broker or a or a massive broker. You want to have access to different markets and different solutions. Um, but yes, it is clearly something we have seen, some brokers say. Um, well, we only do a couple of these products a year. Is it really worth going through this enormous process for it? So there have been considerations about, you know, Are they going to carry on with absolutely every product? Yes.</span></p> <p><strong>Speaker 0</strong>: <span>Another big topic at the moment is cost of living. And everyone's saying they've got, you know, less money to do what needs to be done. I mean, how how are you seeing this affect the broker market and what what are some of the some of the solutions that brokers can produce, particularly their their clients?</span></p> <p><strong>Speaker 1</strong>: <span>Well, the cost of living is an issue for our members, but yes, we are seeing it for their clients as well. So uh, Bieber has conducted research. Uh, other firms, like Premium Credit have conducted research, which features in our manifesto and what we've seen. There is clients cutting back on all areas. So it's</span></p> <p><strong>Speaker 1</strong>: <span>personal loans clients cutting back on things like add-ons. It's commercial clients reducing sums insured, reducing indemnity periods. And these are all really worrying trends that we haven't seen that literally every area has seen a reduction, a cutback in the cover provided.</span></p> <p><strong>Speaker 1</strong>: <span>So from our perspective, we we've tried to give the members tools to try and help discuss these issues with their clients. So we've worked with all to produce an under insurance guide. We've worked with our friends at Quest Gates, the loss adjusters to produce a guide on valuations because what we're seeing is interest rates changing and inflation really high. The cost of</span></p> <p><strong>Speaker 1</strong>: <span>more materials and labour going through the roof. And every year that means that actually, to reinstate your property or or other risks as well it's going to you need to consider Is that going to be more and more that we need to ensure so it's it's raising the awareness. It's helping give our brokers the tools and so that the broker can have a conversation with the client about.</span></p> <p><strong>Speaker 1</strong>: <span>I know we only did this valuation a year ago, but, um, do you appreciate the indexation? Um, the cost of raw materials, everything that's affecting this because we want to make sure that if there is a claim that broker is able to, you know, help that client through that claims process and deliver a fabulous outcome where they're getting full reinstatement for repair and there's no</span></p> <p><strong>Speaker 1</strong>: <span>quibbles over everything. So it's a job that we're doing, but we're, you know, fighting against that tide of of inflation. So we we really need the chancellor to to sort that out. OK, I I want</span></p> <p><strong>Speaker 0</strong>: <span>to come back to something you talked about earlier on the regulatory system because I think you were implying that insurance should get a insurance. Brokers should get a bit of a lighter touch than perhaps some other parts of the financial services sector. Was I right in that interpretation? If so, what? What would you want that regulatory landscape to look like? I</span></p> <p><strong>Speaker 1</strong>: <span>think what we're seeing is</span></p> <p><strong>Speaker 1</strong>: <span>our sector general insurance brokers paying for the failures of some other sectors so For example, look at the financial services compensation scheme. The F S CS</span></p> <p><strong>Speaker 1</strong>: <span>That system is has been created to protect consumers from the failure of firms. Now we very rarely get failures in our own sector. But if you look at the investment sector, there are frequent failures there. And what happens is the way the model is structured for the the fee funding classes is that brokers are basically paying a considerable amount into the sort of overall pool for the failures of investment firms. So that's not fair. How can we budget for that?</span></p> <p><strong>Speaker 1</strong>: <span>How can we, um, you know, be prepared for it? How can we stop it? There's there's very little control we have. So what we've done is put some proper research together, uh, put some proposals to the regulator to say, Look, we think there's a better way so that consumer perceptions are still there. Absolutely. But it's it's more proportionate. It's fair.</span></p> <p><strong>Speaker 1</strong>: <span>Should pay, not the innocent, low risk insurance brokers. So all we want is something that's, um I think the insurance minister uses the words simple, effective, proportionate. That's what we want. So not a lighter touch. What we want is something that's suitable for us, something that's fair whereas at the moment we feel is quite unfair.</span></p> <p><strong>Speaker 0</strong>: <span>Um, the latest guide from Bieber is on cyber insurance aimed at, uh, SME s how big an issue is cyber for for that part of the market. Have you focused on it? Now,</span></p> <p><strong>Speaker 1</strong>: <span>cyber is a real growing threat, and I think more and more of our our clients are</span></p> <p><strong>Speaker 1</strong>: <span>are being attacked and having issues with the cyber threats. So, um, you know, we have a great scheme. Um, we have a a new guide. And the reason for having that guide is because there's a very low take up of cyber insurance of standalone cyber insurance. Particularly SME s don't have sufficient protection across the board, uh, nationally. And so, by putting a guide together, that again can be a tool that members can use</span></p> <p><strong>Speaker 1</strong>: <span>to raise awareness of the threats. But also, cyber insurance isn't just a basic policy that pays out for a claim. It it does things like it gives, um, threat intelligence. It does vulnerability scanning, and it's a great risk management tool so that if there is, um, an issue, it can be identified before something goes wrong. And I think the the phrase that we use is that you don't have to make a claim to get value from your cyber insurance. It can give great value in just what it delivers there. So</span></p> <p><strong>Speaker 1</strong>: <span>so there's a lot of benefits to be had. More clients could benefit from it. And and risks are changing. It's not simply ensuring that property risk anymore. It's intellectual property. It's cyber risk. It's things like that, and more and more clients are exposed. So we've got a job to do in raising awareness. Um, and putting this guide out to hopefully help people get the cover that they</span></p> <p><strong>Speaker 0</strong>: <span>need. We have to leave it there. Graham Gill. Thank</span></p> <p><strong>Speaker 1</strong>: <span>you. Thank you.</span></p>