Insurance broking businesses improved their profitability last financial year despite a subdued economic environment and increased competition, according to a study by Macquarie Business Banking.

About 83% of businesses increased revenue, while earnings before interest, tax, depreciation and amortisation increased to 25% of revenue from 20% in 2011, the last time the survey was conducted.

“The continued growth across the industry demonstrates the professional approach insurance brokers take to doing business, their passion for the industry and their ability to build strong, long-term client relationships,” Macquarie Head of Insurance Broking Rachael Lavars said.

The Insurance Broking Benchmarking Report is based on a survey of 201 broking businesses across the country.

Larger firms tend to have stronger revenue growth, while the results point to continued industry consolidation, with the number of businesses willing to buy or sell increasing to 22% from 14% in 2011.

Clients’ economic hardship is considered a key risk, particularly in Victoria, while online insurers are seen as a significant competitive threat by 59% of brokers nationally.

Staffing levels have remained largely steady, but more business development managers are being appointed in high-profit companies, Macquarie says.

About 59% of respondents identify their websites as areas of planned capital investment in the next three years, while 33% will spend on customer relationship management systems.

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