Insurance intermediaries saw their revenue rise 15.7% last year to reach £24.5bn – up from £21.2bn in 2022.
Commissions earned were up 15% from £17.7bn to £20.4bn, while fee income rose almost 13% from £2.3bn to £2.6bn year-on-year.
However, the Financial Conduct Authority (FCA) Retail Mediation Activities Return (RMAR) figures for 2023 showed the number of firms registered as insurance intermediaries dropped 3.5% from 10,076 to 9,719 over the same period – with smaller firms seeing the largest drop.
The available FCA data does not breakdown any further to show how much was earned by those operating in the health or protection markets compared to their general insurance counterparts.
Revenues up
Insurance intermediaries posted commissions of £19.1bn over the year, with fees of £2.53bn and other revenue of £1.47bn from insurance business.
In terms of average revenue, those firms with less than £100,000 income recorded total insurance revenue of £38.2m and an average insurance revenue per firm of £37,929, down from £38,081 in the previous year. The number of firms in this category fell to 1,006 firms from 1,127 in the previous year.
Those firms with £101,000 to £500,000 revenue recorded £294.4m and an average of £261,009, up from £255,000 in 2022. This group also declined in numbers from the previous year – dropping from 1,225 to 1,128.
And among firms posting between £501,000 to £10m revenue, this group posted total insurance revenue of £3.2bn and an average of £2.27m. The number of these firms was largely unchanged, dipping down to 1,407 from 1,411 in 2022.
In the top band of firms posting more than £10m in revenue, this segment collected income of £19.54bn up from £16.5bn with an average of £72,896,009. And bucking the trend, this group grew in numbers to 268 from 242 in 2022.
Value of PII insurance premiums
Turning to the value of professional indemnity insurance (PII) premiums paid by insurance intermediaries, the smallest firms paid the most proportionally of all those recorded.
Small intermediary firms paid £3m in PII, with an average premium per firm of £3,791 from average regulated revenue per firm of £45,466, with PII premiums equating to 8.3% of regulated revenue.
Firms with £101,000 to £500,000 revenue paid £10.3m, with an average PII premium of £9,192, average regulated revenue of £262,735 and a 3.5% PII premium as a percentage of regulated revenue.
Firms with £501,000 to £10m of revenue, paid £154.1m with an average premium per firm of £112,509 on average regulated revenue of £2.25m which was 5.0% of regulated revenue.
Although the figures were far larger, the biggest firms proportionally paid the lowest PII bills.
Those earning more than £10m of revenue paid almost £383m for PII, with an average premium of £1.47m and average regulated revenue of £74.5m, meaning PII cover accounted for just 2.4% of regulated revenue.