Broker Barometer shows 56% of Insurance Brokers feel the worst of the recession is over.
56% of Irish Insurance brokers believe that the recession is over but 94% report that it is difficult for businesses to get finance from banks and 87% report that the general public do not have enough confidence to spend money, according to a survey published by Friends First, in association with Millward Brown Lansdowne today.
The research was carried out across a sample of 100 independent brokers nationwide to gauge the attitudes and perceptions of brokers to their own business and the economy that they are currently operating in. As part of the survey, we also attempted to capture the perceived view of brokers’ clients.
According to the Friends First Broker Barometer, the recession is clearly impacting on pension and saving patterns, with brokers reporting that:
- Half their clients are reducing their contributions to pension/investment products. 94% of respondents reported the loss of a job or income being the direct cause of this.
- Job security is the key concern among consumers with 60% of customers very concerned about job losses.
- The value of their home is a rising concern for customers with 46% of respondents citing it as a major concern compared with 39% in 2009 – no doubt due to the increase in prevalence of negative equity amongst homeowners.
Brokers reported that:
- Long term mortgage debt is a bigger problem for clients – 65%, compared to short term credit card debt – 35%.
- Brokers currently report that 17% of customers are experiencing difficulties with their mortgage repayments.
- 13% of brokers have added a debt advice service to their brokerage. However, 77% expect debt advice to increase as part of their services in the next 12 months
Brokers report that 36% of their clients own investment properties which is indicative of the trend in property investment in Ireland in recent years and a likely indicator of where clients saw part of their pension provision coming from. But brokers take a more sober view of the property market in the wake of the crash; over 70% now believe that the yield/return ratio is the only way to access properties for investment purposes, whilst very few see prices returning to pre bust levels. There is little appetite for speculation any more from the broker viewpoint.
According to the Broker Barometer 55% of people blame reckless lending by banks as the main reason for over indebtedness in Ireland today. However, over half of respondents stated that they believed some ownership of personal debt must be taken by individuals themselves. Almost 8 in 10 brokers believe that a lack of trust in banks presents a business opportunity for them. Two thirds of brokers now expect their business to improve over the next 12 months compared to just under half a year ago.
Commenting on the Barometer, Eamonn Twomey, Head of Marketing, Friends First said: "While there are some signs that a recovery is underway, it is clear that consumers are finding it very difficult to save for their futures. While consumers are trying to repair their personal balance sheets many are finding it difficult to do so in the face of reduced salaries. Against this back drop financial planning for the future is difficult and this does present an opportunity for independent brokers.”
