Insurance intermediaries saw their total revenue increase by more than £2bn last year – rising 10% from £18bn in 2021 to £20bn.
Meanwhile, the total number of insurance intermediary firms declined 4.2% by 177 companies from 4,182 in 2021 to 4,005.
The data from the FCA’s Retail Mediation Activities Return (RMAR) showed falling numbers of firms across almost all the insurance sector, but the largest advice firms grew in number.
It was the smallest firms with revenue of less than £100,000 which saw the steepest decline in their numbers, with 136 fewer firms – falling 10.8% from 1,263 firms in 2021 to 1,127 last year.
The band of firms with revenue between £101,000 and £500,000 also fell by 53, from 1,278 in 2021 to 1,225 in 2022.
And the numbers also fell for firms with revenue between £501,000 declining from 1,432 firms in 2021 to 1,411 last year.
However it was a different story for the top band, made up of firms with revenue above £10m which grew 15.8% increasing from 209 firms in 2021 to 242 in 2022.
Increased revenues for large firms
Large firms also increased their revenue – up from £14.5bn in 2021 to £16.5bn last year, an increase of about £2.0bn – or 13.8%.
But despite that growth, the average revenue for those large companies declined slightly from £69.5bn in 2021 to £68.1bn – a decrease of 2.0%.
The average revenue also fell 1.3% for firms with a revenue between £501,000 and £10bn, moving from £2.20bn in 2021 to £2.17bn.
But average revenues increased for the two smaller bands. For firms with revenue between £101,000 and £500,000, average revenue rose 1.2% from £252,000 in 2021 to £255,000.
And for the lowest band for companies with revenue up to £100,000, revenue improved 2.4% from £37,178 in 2021 to £38,081 last year.
Non-investment insurance businesses
Taking a wider view, there was a decline in the number of firms selling non-investment insurance businesses last year, even as revenue for the sector increased by almost £2bn, according to the Financial Conduct Authority (FCA) data.
The number of firms selling non-investment insurance fell 1.5% to 10,076 year compared to 10,227 in 2021, a decline of 151 companies.
The fall continues the trend since the Covid pandemic which has steadily dropped since it peaked at 10,410 in 2019.
But the picture is not all bleak for the sector, as the total regulated revenue for insurance sales increased 9.6% or almost £2bn from £19.3bn in 2021 to £21.2bn.
It was the highest rate of revenue since at least 2016.
The vast majority of that revenue was driven by commission, which increased to £17.7bn last year, up from £16.3bn in 2021 – an increase of 8.6%.
As a percentage, it was fees and charges which showed the highest rate of increase. The firms made £2.3bn in 2022 compared to £2.1bn in 2021, an increase of 9.5%.
The biggest increase of all came from the smallest revenue stream ‘other revenue’. This increased to £1.168bn last year from £987m in 2021 – up 18.3%.
