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A retail broker holds the client relationship. They meet the client, take instructions, structure the submission, present the risk to insurers, negotiate terms, place the risk, and handle claims. For most standard UK PI placements — a mid-sized accountant, a two-partner surveyor firm, a small IFA — the retail broker deals directly with insurers on the client’s behalf. There is no wholesale layer. The retail broker’s ICOBS 4.4 disclosure duty runs to the client; the placement is a two-party affair between broker and insurer.
A wholesale broker does not hold the client relationship. They provide market access to retail brokers — typically for placements that need specialist Lloyd’s syndicate access, non-standard capacity, high-limit layered programmes, distressed risks, or cross-border components the retail broker cannot handle directly. The wholesale broker’s client is the retail broker; the underlying policyholder is a client-of-a-client from the wholesale broker’s perspective.
Five common scenarios where the wholesale route is used on UK PI.
Higher limits than the retail broker’s direct market access covers. A £5m limit for a two-partner accountant can be placed directly; a £30m or £50m tower for a large architect practice on a Building Safety Act-scoped project typically requires layered placement across multiple insurers including Lloyd’s syndicates, and the wholesale broker holds those relationships.
Distressed risk requiring specialist appetite. A firm with a claims history, an adverse regulator notification, or a niche exposure that the retail broker’s standard panel will not write, but where a specialist wholesale broker can access an underwriter with the appetite.
Lloyd’s-only placement. Where the risk must be placed in the Lloyd’s market rather than in the company market, direct Lloyd’s access requires either a Lloyd’s broker’s licence or use of a wholesale broker who holds one. Many UK retail brokers use a wholesale broker for Lloyd’s access rather than obtaining direct accreditation.
Cross-border or unusual jurisdiction. Where the client has exposures outside the UK that the retail broker cannot handle directly — work performed for US clients under US-jurisdiction indemnity, ROI-based work, offshore trust work — a wholesale broker with the cross-border capability can access appropriate capacity.
Specialist wording work. Where the placement requires bespoke wording amendments beyond the retail broker’s technical range — principal designer wording under BSA 2022 s.135 for architects on higher-risk buildings, MTC-plus enhancement for solicitors, tax scheme exposure carve-in for accountants — a specialist wholesale broker’s underwriting team can negotiate the wording with the market.
Beyond the retail-wholesale split, another layer common in the UK PI market is the managing general agent (MGA) or coverholder. An MGA writes business on behalf of an insurer under a delegated authority agreement. The MGA has the authority to bind risks up to a defined limit within an agreed underwriting appetite. The MGA is not the risk carrier — the underlying insurer is — but from the client’s perspective, the MGA looks like the placement counterparty.
MGAs are common for niche classes and specialist professions. An MGA may hold a delegated authority binder from a Lloyd’s syndicate to write specific classes; a retail broker may access that MGA either directly or through a wholesale broker. The client is entitled to know which entity is the risk carrier, and what the MGA’s role is. A well-run placement makes this clear on the slip and in the demands-and-needs statement. Our wiki explains what an MGA is and how delegated authority works.
Lloyd’s of London is not a single insurer but a marketplace of syndicates. Each syndicate is capitalised by members (Names, corporate members, and increasingly institutional capital) and managed by a managing agent. Business is placed at Lloyd’s through Lloyd’s brokers — either directly by a retail broker with a Lloyd’s licence, or via a wholesale broker with one.
Lloyd’s matters to UK PI because it holds significant capacity for specialist professions, hard-to-place risks, higher-limit programmes and cross-border exposures. The Lloyd’s chain of security — syndicate funds, members’ funds at Lloyd’s and the Lloyd’s Central Fund — stands behind every Lloyd’s policy. Financial strength ratings change, so check the current position on lloyds.com rather than relying on a figure quoted on any broker’s website, including this one.
When a placement goes through a wholesale broker, the commission is split between the retail broker and the wholesale broker. Split ratios vary by placement and by arrangement; on delegated authority business the wholesale share is often higher. The specific figures on your own placement are a question for your broker, and they should be able to answer it precisely.
Under ICOBS 4.4, a commercial customer who asks is entitled to the total broker remuneration on the placement, not just the retail broker’s own cut. A broker who discloses only their own share has not answered the question in full. Our note on commission and fee transparency sets out what the rules actually require.
Claims handling depends on the arrangement. For most placements, the retail broker remains the client-facing claims contact and manages the notification and handling on the client’s behalf. The wholesale broker’s role at claim stage is typically limited to insurer liaison — passing notifications, tracking coverage decisions, negotiating settlements — while the retail broker keeps the client informed.
On complex claims where the wholesale broker structured the placement, they may take a more active role, particularly on Lloyd’s placements where they hold the relationship with the leading syndicate. The client should know who is doing what: named contacts at both layers where relevant.
Most standard UK PI placements do not need a wholesale broker. Adding a wholesale layer adds a commission cut, a handoff in communication, and an additional intermediary in claims. For a small-to-mid-sized professional firm on a mainstream sector wording and a limit within the retail broker’s direct market access, the direct route is more efficient. A retail broker who routes a mainstream placement wholesale without a specific rationale — limit, capacity, appetite, wording — is not adding value proportionate to the split.
The buyer’s question at placement: “Are you placing this direct or through a wholesale broker, and if wholesale, why?” A specific, factual answer is the mark of a well-run placement. A vague one is not.
Both retail and wholesale brokers must be FCA-authorised for insurance distribution. The underlying insurer, or Lloyd’s syndicate, must be PRA-authorised or authorised in an equivalent regime for overseas capacity. The FSCS covers UK PI claims where the authorised insurer becomes insolvent, subject to the scheme’s rules. The wholesale route does not change that position: your protection depends on the underlying insurer’s authorisation status, not on how many brokers sit in the chain. You can check any firm on the Financial Services Register.
The wholesale layer takes a share of the commission paid by the insurer. Whether that translates into a higher premium depends on the market and the risk — on a placement that could only be made through the wholesale route, the comparison is not with a cheaper direct placement but with no placement at all. Ask your broker to explain the pricing and the total remuneration.
Some wholesale brokers take direct client work, but many operate broker-to-broker only and are not set up to advise an end client. Ask the specific firm.
No. A retail broker holding a Lloyd’s licence can place directly. Many use a wholesale broker for Lloyd’s access rather than holding the licence themselves.
The document that sets out the risk, the terms and the underwriter’s stamp of acceptance in the London market. On Lloyd’s placements the wholesale broker often owns the slip.
No. An MGA writes business on behalf of an insurer under a delegated authority. The insurer is the risk carrier and the party that pays the claim.
Yes. Knowing the placement structure tells you whether the commission arrangement is proportionate and whether the wholesale layer is adding something you need.
PRIN 2A applies down the retail distribution chain, so where the client sits in that chain every firm in it owes outcome duties. Most commercial PI sits outside the retail chain, but the fair-value principle remains a reasonable test to apply to any placement.
Related reading: Broker remuneration explained · Broker fees and commissions explained · A-rated vs unrated PI insurers · Directly authorised vs appointed representative · PI tools hub
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.
