Brightside's Mark Cliff on why chaos is needed for success

It’s December, so newspaper columnists will be writing their year-end reviews.

This time around, I have no doubt there will be lashings of 'OMG' hyperbole about how the world has changed forever. The UK's decision to leave the European Union and the US's decision to elect Donald Trump as president both represent the death knell of a post-war liberal consensus and we're all off to hell in a handbasket. And so on. And so on, ad nauseum.

But for once the scribblers will be right. 2016 equals turmoil, and not just macro politics and economics. Closer to home, in personal lines broking, our sector is also doing a good impression of the Elvis Presley classic All Shook Up.

The wave of mergers and acquistions in broking accelerated this year. Rumours continue to swirl around well-known brokers, including high street names. Bluefin, Autonet and a host of others have been swallowed up. Even software houses aren't immune. Insurance Initiatives has been acquired by Lexis Nexis and sale rumours persist for other market players.

Ageas' decision to close Kwit Fit and return to ‘traditional insurance' is the latest turn of the screw in personal lines broking, as, upstream, insurers make big bets between going direct and supporting brokers. And don't get me started on Gable, Enterprise and the un-rated non-doms. Or regulation. Or SSP.

Chaos theory
A volatile landscape? With lots of moving parts? Lots of people with their eye off the ball? No wonder brokers are feeling vulnerable. At this moment, my thoughts turn to German philosopher Friedrich Nietzsche: "You must have chaos within you to give birth to a dancing star."

In other words, chaos is needed for some highly successful brokers to emerge during 2017 and beyond. These brokers will have committed investors, up to the minute digital marcomms and other customer-related tech propositions, and a broad insurer panel. But they will also be happy to take advantage of chaotic competitors. For example, integration costs for acquired businesses mean less available for tech spending.

People get disgruntled under new ownership, and they and their books often find another home. Insurers will be nervous of having too much of their portfolio with one of two distributors, and will seek new deals to manage down their risk.

To be sure, I want Brightside to be one of those 2017 successes, but there will be others too, and as I say Merry Christmas to all in the insurance market, I look forward to discovering next year who they will be.