Will smaller brokers lose out in an EU Exit?

At the end of 2015 QuoteSearcher published an article on youTalk insurance discussing the results of a YouGov survey we commissioned on SME decision makers’ opinions on the EU and how a potential exit would affect their businesses.  Even though the results of this survey showed some split in opinion between SME decision makers, the overall result was that many felt they could live without the EU especially in terms of staffing.

However, in a follow up survey on SMEs and exporting opportunities, QuoteSearcher has found that SME decision makers are actually more positive about the EU than we previously thought – as long as it benefits them.  In our initial survey, 46% of respondents stated that if the UK left the EU it would have “no effect” on their relationships with their customers and/or clients. Conversely, in our follow up survey 31% said that the EU offers UK-based SMEs “a lot” of opportunity when it comes to exporting their products and services abroad.

In fact, the second survey was overall much more EU-positive than the first, with the latter showing that most SMEs (64%) think Europe is the most profitable potential partner to export products to. But what does this mean in terms of insurance brokers? Recently, we have seen members of the British Insurance Brokers’ Association (Biba) debating whether the EU is beneficial to their businesses, with smaller brokers generally being more Eurosceptic.

It’s not always easy for insurance brokers to expand into foreign markets, even to countries within the EU covered by the new Insurance Distribution Directive (IDD).  Generally, smaller brokers find it difficult to find the resources or finances required to move into foreign markets, meaning they don’t always feel the benefits of being in the EU.

As with our initial survey, after receiving the results of our latest study we contacted Professor Simon Down, Deputy Dean for Research and Enterprise at The Lord Ashcroft Business School, Anglia Ruskin University, to analyse our findings. “From this study we can see evidence that the more mature and experienced the respondent, the more likely it is that they’ll see Europe as a positive environment for exporting,” he said.  “In the previous study we saw that opinions of SME decision makers on hiring staff outside the UK were generally more negative, however when it comes to exporting in the EU and even worldwide they are more positive.”

“However, exporting is generally not as relevant for those that are in their first year of trading which is understandable. When these SMEs expand though it’s likely this will change. Bigger companies tend to have more positive attitudes towards exporting in Europe.  This study shows us the head, before we saw the heart. The reality is most companies will go where the money is – however this doesn’t mean they don’t have contradictory personal political views.”

One of the biggest questions that insurance brokers want answered when it comes to the EU Referendum is how staying or leaving the European Union will affect their businesses. Larger firms already know that a “Brexit” may limit their abilities to trade abroad, but what about small to medium sized brokers? It’s true that leaving may make it even harder for their companies to expand into new markets, but are they really feeling the benefits in the first place?