Regulations and digitalisation, a new deal for brokerage

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Since its inception in the 1970s, the brokerage business has continued to attract. Its census dating back to 2013, each year the number of new brokers approaches 10%. However, in 2019, for the first time, ORIAS, the single register of insurance, banking and finance intermediaries, recorded a 3% decrease in the number of credit brokers. In the hands of new and growing regulatory and technological challenges, the broker market is entering a phase of concentration. consolidation. A real asset for the territory, brokerage firms have a great flexibility in their organization, which allows them to meet the needs of the regional economic fabric.

A new regulatory situation that maintains a gap in treatment between players in the sector

With the digital transformation affecting all sectors of activity, the broker business is no exception to this turning point. We must be able to negotiate this shift by combining digital and local and consulting services. Being a broker means, at first glance, analysing the client’s need to be able to direct him more finely to a new provider. Their great flexibility in terms of organisation was also the subject of a debate in the National Assembly around the establishment of the self-regulation of brokerage, which had been impelled in September 2018 by the General Directorate of the Treasury (DGT). A reform that should be made operational on 1 January 2020. The difference in status between insurance brokers and insurance companies explains, for example, this difficulty in ensuring control of this profession. For example, the Prudential Control and Resolution Authority (ACPR) does not permanently control brokers, unlike insurance companies. In concrete terms, the self-regulation of brokerage should be carried out through professional associations, for example the association, of the delegates of insurance companies in the Bordeaux region (ADCAB).

These new regulatory frameworks under the PACTE Act therefore require insurance brokers to join a representative body approved and controlled by the Prudential Control and Resolution Authority (ACPR). Although the regulatory process was initiated with the Lagarde Act in 2010, the Constitutional Council’s decision declared the 2017 article of the PACTE law to be unconstitutional, providing for the creation of representative professional associations for insurance brokers. This decision, issued on 16 May, undoubtedly brings to a halt the entry into force of the sector’s self-regulation.

The South West, an attractive region for brokerage

If regulation is developing, it is because brokerage practices are actually evolving. While the legislative uncertainty is very prevalent, the market share of brokerage in France continues to increase according to Apic, the Professional Association of Credit Intermediaries. Whether it’s brokerage in insurance, real estate, construction… the business becomes more complex and calls more and more on a specific expertise that requires the appeal of different profiles. However, between 2011 and 2015, the number of brokers present in New Aquitaine fell by O.2% over the four years and in 2015 counted 1148 brokers in the territory of New Aquitaine. This slight decline is in stark contrast to other territories such as Ile-de-France and Hauts-de-France, which suffered a 7% and 8.4% drop in the number of brokers. Among these attractiveness of brokerage activities, New Aquitaine is among the first regions where savings are the most important.

A focus on local brokerage is one of the objectives of the Ministry of Economy and Finance. A consumer and real estate broker in Bordeaux, Cré10FI offers packages specifically dedicated to companies in which each agent benefits from customer contacts. This makes it easier for independents to prospect so that they can focus on the commercial part of their business.

On a local level, more and more brokers are interested in the contributions of digital and artificial intelligence in their profession. This is particularly the case for Ashler and Manson, a brokerage firm specializing in real estate loans, so founder Aymerick Pénicaut is originally from Limoges. The company developed Preacor, a scoring tool in the form of an application associated with artificial intelligence to allow customers to estimate the percentage chance of getting their credit. Information developments are therefore crucial for the brokerage sector. These developments require significant financial investments in research and development. As such, Ashler and Manson is supported by the New Aquitaine Region and labelled French Tech Bordeaux.

Fintech is therefore involved in business law, taxation and brokerage. as a skills accelerator to better anticipate opportunities and assess risks. New regulatory frameworks and digital transformation are thus a new task for brokering.

Justine ANGIBAUD

Sources:

Orias official website

Apic France’s official website

Special brokerage file, the Insurance Argus

“Insurance Intermediation: From Digital to Artificial Intelligence” Report, Intermedius Institute, 2018

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