Rising premiums are the biggest external concern for brokers, according to the first Lumley Insurance Benchmark broker survey.

The survey is a good way to “check the pulse of the broker market”, Lumley CEO John Nagle told insuranceNEWS.com.au. “We went to more than 100 organisations and took a sample of what was on the top of their minds.”

Some 45.5% of the brokers surveyed identify premium increases as the external factor most affecting their business, followed by falling consumer confidence (38.6%).

More than 76% of brokers consider the economic environment to be average, good or very good, with 75.2% enjoying gross written premium increases and 52.5% reporting growth in client numbers.

“The results were mixed, but overall many brokers have a positive outlook on the state of the economy and their own business,” Mr Nagle says.

The internal issues that most affect business performance are structure (22.6%) and staff retention (20.6%).

The growing complexity of business and expansion opportunities are driving recruitment, with 59.4% of brokers planning to increase staff levels in the next six months and just 11.9% making cuts.

However, many brokers report difficulty finding experienced staff.

“This response highlights a real disconnect between broker ambitions and the ability to grow,” Mr Nagle told insuranceNEWS.com.au.

Problems finding staff are partly caused by the level of training and qualifications required, he says.

“It may also be an indicator that salaries are not keeping pace with what people can earn elsewhere.”

Liability (45.5%), professional indemnity (43.6%) and property (34.7%) are the product suites most often identified as growing in popularity over the past six months.

Brokers say more than 35% of clients are downgrading or ceasing personal lines and property coverage – raising further questions about underinsurance and affordability.

Some 81% of brokers say their clients remain underinsured for personal cover and 78% say new customers have inadequate business insurance.

Mr Nagle says this finding “reinforces the need for all Australians to undertake regular reviews of their assets and risks, to ensure they are adequately insured”.

Affordability is more of an issue since the repricing that followed the Queensland floods and other extreme weather events of 2011.

But Mr Nagle issues a stark warning on accountability. “Even with the best advice, people are choosing to remain underinsured.

“We have to accept that people are making this conscious choice, but they have to accept they will be accountable if things go wrong. The Government cannot always bail people out.”

Rising premiums are identified by 57.4% of brokers as the main concern for clients, followed by uncertainty over coverage (16.8%) and confusion over the type of insurance they need (10.9%).

Brokers say claims service is the most important factor when choosing an underwriter, followed by the relationship they have with the underwriter and breadth of policy coverage.