Brokers are still by far the biggest distributors of commercial insurance, and it’s going to stay that way, according to the JP Morgan and Deloitte 2004 General Insurance Industry Survey.

Underwriters say brokers handled 78% of commercial business in the year to June 30, an increase of 5% over 2003. The forecast for the latest survey period had been 75%.

National Insurance Brokers Association CEO Noel Pettersen says the belief that brokers’ days were numbered “has been replaced by a more realistic view of the distribution process, and the integral role that brokers play in it”.

The survey shows that insurers expect brokers to handle only 71% of commercial business by 2006, rising to 75% in five years. But such figures have been shown in the past to be wobbly, and JP Morgan Senior Insurance Analyst Shane Fitzgerald says there are no obvious trends.

He told Sunrise Exchange News there doesn’t seem to be much method in underwriters’ predictions, and he expects brokers to be the main distributors of commercial insurance for the forseeable future.

“Underwriters always predict that broker distribution will drop, and every year brokers prove them wrong.”

The report found no evidence that any other distribution channel – including the direct market ­is making inroads into commercial insurance distribution.

Insurance agents accounted for 8% of commercial business during the survey period – the same as in the previous year. This is forecast to rise to 13% in 2006 then drop to 7% by 2009.

The main distribution of personal lines is still through direct channels – including call centres, direct mail and the internet – but there has been a shift in recent years. The direct market now accounts for 61% of personal lines business, compared with 78% in 2002.

Personal lines circulated through call centres fell 6% to 40% for the latest year, and broker distribution rose 3% to 11%.

The survey suggests that the internet has been less successful as a distribution channel than initially expected.