The Financial Conduct Authority (FCA) published early January the results from its survey of firms to determine their financial resilience and assess the potential impact of the Coronavirus (Covid-19) pandemic on their business activities. Meanwhile, in France, French insurance intermediaries are showing resilience, despite growing fears about the consequences of the pandemic.


Through its sur­veys, the FCA tried to assess the real-time effect of the pan­de­mic on the finances of the firms that the wat­ch­dog pru­den­tial­ly regu­lates. The sur­veys were sent to 23,000 regu­la­ted firms, and show that, bet­ween Februa­ry (pre-lock­down) and May-June (during the impact of the first lock­down), firms across the sec­tors expe­rien­ced signi­fi­cant change in their total amount of liqui­di­ty. The watchdog’s sur­vey did not include the 1,500 lar­gest firms in the UK finan­cial sec­tor, which are regu­la­ted by the Bank of England.
The results from the sur­vey bro­ken down by indi­vi­dual ques­tion can be found by cli­cking here :
The coro­na­vi­rus (Covid-19) finan­cial resi­lience sur­vey data | FCA.

Here are the key fin­dings of this survey :

  • Up to 4,000 finan­cial ser­vices firms in the UK are at risk of fai­ling due to the coro­na­vi­rus pandemic ;
  • Three sec­tors saw an increase in liqui­di­ty bet­ween the two repor­ting per­iods : Retail Invest­ments (8%), Retail Len­ding (8%) and Who­le­sale Finan­cial Mar­kets (83%), the lat­ter seeing the grea­test increase.
  • The other 3 sec­tors saw a decrease in avai­lable liqui­di­ty : Insu­rance Inter­me­dia­ries & Bro­kers (30%), Pay­ments & E‑Money (11%) and Invest­ment Mana­ge­ment (2%).
  • Howe­ver, the wat­ch­dog said stron­ger mar­kets and a return to eco­no­mic growth would sup­port UK finan­cial ser­vices firms.

The area of insu­rance inter­me­dia­ries and bro­kers saw a decline in terms of avai­lable liqui­di­ty : from £16.2 bil­lion in Februa­ry 2020 to £11.4 bil­lion in May/June – their total liqui­di­ty resources went down because of the coro­na­vi­rus cri­sis. Never­the­less, data on insu­rance inter­me­dia­ries can be put into pers­pec­tive, as, in both Total and Median data, insu­rance inter­me­dia­ries’ cash inflow was suf­fi­cient to cover cash needs.

Accor­ding to the FCA, 44% of the sur­veyed insu­rance inter­me­dia­ries and bro­kers have fur­lou­ghed staff and 19% have recei­ved a govern­ment-backed loan. The FCA urged cau­tion about using the sur­vey data to make pre­dic­tions. In addi­tion, it was also points out that the sur­vey was conduc­ted prior to the exten­sion of the fur­lough scheme, deve­lop­ments in COVID-19 vac­cines, and the announ­ce­ment of new restrictions.


A stu­dy conduc­ted by the invest­ment bank Cam­bon Part­ners last May shows that a drop in tur­no­ver and pro­fi­ta­bi­li­ty is anti­ci­pa­ted by the whole sec­tor. 26% of insu­rance inter­me­dia­ries fore­cast a drop in tur­no­ver of around 20% and 23%, and expect a drop in pro­fi­ta­bi­li­ty of around 10%. Faced with these rather gloo­my eco­no­mic fore­casts, 75% of bro­kers and agents never­the­less state that they have adap­ted their deve­lop­ment stra­te­gy (31% iden­ti­fied new activities/products to com­pen­sate for the drop in acti­vi­ty) and adop­ted defen­sive mea­sures (25% froze ongoing recruitment).

For its part, AGEA, the natio­nal fede­ra­tion of gene­ral agents’ unions, conduc­ted its own sur­vey on the Covid-19 cri­sis among its mem­bers last sum­mer. It emer­ged that more than half of the agents expres­sed fears about their future. Can­cel­la­tions of poli­cies, a drop in col­lec­tions of pre­mium, as well as com­pe­ti­tion from bank-insu­rance are their main causes for concern. Here are the key points of this survey :

  • 52% of agents expres­sed fears for their future.
  • 48.4% of Non-life agents noted, during the coro­na­vi­rus cri­sis, a drop in col­lec­tions of pre­mium and the­re­fore in commissions.
  • 36.8% of Life agents noted a drop in col­lec­tions during the coro­na­vi­rus crisis.

Accor­ding to this sur­vey, agents expe­rien­ced a drop in col­lec­tion of pre­mium of bet­ween 1% and 10%. This decrease lea­ded to a drop in com­mis­sions. “Our ana­ly­sis is that this drop in com­mis­sions is cor­re­la­ted with the com­pa­nies’ sup­port plans for pro­fes­sio­nal cus­to­mers. For example, when two months of pre­miums are refun­ded to a client, it is 20% less on the agent’s com­mis­sions,” explains Gré­goire Dupont, AGEA’s CEO.

As for bro­ker, PLANETE CSCA, the Union of insu­rance bro­kers in France, publi­shed a report last May , high­ligh­ting the fact that insu­rance bro­kers have shown resi­lience in their mana­ge­ment of the cri­sis. Accor­ding to this publi­ca­tion, they were able to adapt their wor­king methods and their rela­tion­ships with their clients, which were streng­the­ned during the lock­down per­iod. Des­pite these posi­tive fin­dings for the pro­fes­sion, the report states that insu­rance bro­ke­rage firms could also face eco­no­mic dif­fi­cul­ties if the eco­no­my as a whole were to expe­rience dif­fi­cul­ties due to the health cri­sis. It also points out that the eco­no­mic cri­sis has not yet revea­led all its effects.


Some lines of busi­ness, such as motor insu­rance, have been dee­ply affec­ted by the pan­de­mic, although non-life insu­rance as a whole is expe­rien­cing growth in its pre­mium volume. Pre­mium income at the end of 2020 amoun­ted to 58,850 mil­lion euros, 8.3% less than the pre­vious year, as recent­ly announ­ced by the Spa­nish Union of Insu­rance and Rein­su­rance Com­pa­nies (Unión Españo­la de Enti­dades Ase­gu­ra­do­ras y Rea­se­gu­ra­do­ras, UNESPA). The asso­cia­tion explains this drop main­ly by “the eco­no­mic para­ly­sis gene­ra­ted by the out­break of the Covid-19 pan­de­mic and the mea­sures taken to contain it”. Never­the­less, the asso­cia­tion empha­sises the “high” levels of sol­ven­cy in the sec­tor, “which far exceed the requi­re­ments of the regu­la­tions “. From the begin­ning of the pan­de­mic, a large num­ber of insu­rance com­pa­nies have taken very favou­rable mea­sures for their clients, such as :

  • The crea­tion of an eco­no­mic fund of soli­da­ri­ty of 37,000,000 euros to indem­ni­fy health professionals ;
  • The exclu­sions rela­ted to epidemics/pandemics inclu­ded in Life poli­cies were not applied.

As for insu­rance inter­me­dia­ries, it is impor­tant to high­light their com­mit­ment to their clients, hel­ping them both to recon­fi­gure their insu­rance pro­grams (par­ti­cu­lar­ly in the event of an increase or decrease in insu­red risks), agreeing on new contrac­tual terms and condi­tions, as well as defer­ring the pay­ment of pre­miums. Insu­rance inter­me­dia­ries, either in per­son and/or wor­king from home, have redou­bled their efforts to conti­nue advi­sing and atten­ding to their clients adequately.

CGPA Europe Under­wri­ting under­lines the fact that, in Spain, there have been no claims against insu­rance inter­me­dia­ries for BI losses ari­sing from the Covid-19 pandemic.

Never­the­less, the last few months, dif­fi­cul­ties have emer­ged in the rene­wal pro­cess of some accounts – most­ly for indus­trial acti­vi­ties – as insu­rance com­pa­nies are often willing to include a Covid-19 clause in their wor­dings, while their finan­cial capa­ci­ties are redu­cing and eco­no­mic condi­tions tigh­te­ning. As a result, inter­me­dia­ries and insu­rers are concer­ned about the deve­lop­ments that will take place in 2021, due in par­ti­cu­lar to the disap­pea­rance of a large num­ber of com­pa­nies and a slow­down in the Spa­nish economy.