A hardening market, constant consolidation opportunities and growing revenues are keeping the smiles on insurance brokers’ faces, with a new Macquarie Relationship Banking survey underlining the sector’s resilience in the global downturn.

The benchmarking survey of more than 200 Australian broking firms shows 83% of brokers achieved revenue growth over the past two years – and 88% expect further revenue growth in the coming year.

Macquarie Relationship Banking Head of Insurance Broking Peter Conquest says brokers are facing favourable conditions supported by both economic and insurance cycles.

“This optimism around revenue lines is supported by the expectation that the long-predicted hardening of premiums will reveal itself soon, providing a natural uplift,” he said.

“Coupled with improved investment revenues as interest rates increase, opportunities for organic revenue growth look strong.”

Despite the strong tailwinds, brokers may notice increased competition and resourcing challenges in the coming months. Some 22% of brokers rate competition as the biggest threat to their profitability, second only to the economy.

The growth of direct insurers in particular is viewed as a “genuine concern”, highlighting the need for brokers to differentiate their service offering.

“A number of brokers have commented that the direct players have become increasingly competitive,” Mr Conquest told insuranceNEWS.com.au.

The war for talent continues, with 67% of the surveyed brokers nominating recruitment as a “considerable business challenge”.

The survey has revealed more than half of all insurance brokers anticipate taking on additional staff “in the near future”.

Some 75% of large broking firms are also on the acquisition trail, with small firms the most likely targets. Mr Conquest says it is a “seller’s market” requiring buyer discipline to avoid overpriced assets.

A detailed assessment of the survey will feature in the December issue of Insurance News (the magazine).