Brokers Demand 'Safe Harbour' from PPI Storm

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Serving the broker community for over 30 years Brokers demand ‘safe harbour’fromPPIstorm obligations to ensure the Insurance Brokers’ Associa- By Martin Friel product was sold properly. tion, gave his backing. “The FSA should tell insur- “We would support this in he Financial Services Au- ers they have a responsibility principle, especially where the Tthority (FSA) has come over this. That responsibility is seller has been acting as an under increasing pressure to not complete but they allowed agent of the insurer,” he said. force insurers to share the bur- a product that was dangerous, “It is unfair that professional den of compensation claims and produced a vast number sellers of insurance have been resulting from the widespread of complaints, to be sold,” Mr grouped with amateurs. There mis-selling of payment protec- Cranny told Insurance Age. is a cuckoo in our nest and we tion insurance (PPI). “As insurers have profited wish to rid ourselves of it.” As broker unrest rises over from the sale of PPI year after However, there is doubt as to huge hikes in their Finan- year, they ought to stump up whether any FSA action would cial Services Compensation some cash – £100m would be influence this year’s levy. Scheme (FSCS) contributions, a good start.” IanRitchie,managingdirector individuals and organisations In his letter, Mr Cranny calls of RWA Compliance Services, have started to question what on the regulator to take action said that brokers should look to checks insurers put in place against insurers as it did in lobby for next year: “Looking to ensure that their products mortgage PPI: to 2011, there is going to be were sold appropriately. “I would formally like to ask more of the same and it’s going Mike Cranny, regulatory con- the FSA… to consider taking to hurt brokers. Perhaps an sultant and principal of Create action against the insurers that insurer dialogue with the FSCS Solutions, has written to the provided PPI and that, in the to contribute to the levy would regulator on behalf of his bro- same way it came to its ‘safe be in the interests of the market ker clients calling for insurers to harbour’ agreement in October with the PR payback for insur- be held to account for their role 2009 over accidents sickness ers that could be seen to be the in the mis-selling of PPI. and unemployment insurance, brokers’ friend by setting off In the letter, Mr Cranny it ask the insurers (and all firms further increases.” argues that, based on the level that distributed PPI), to vol- A spokeswoman for the of complaints and compensa- untarily agree to setting up a Association of British Insur- tion claims that have arisen compensation fund.” ers would only say it was the from the sale of PPI, insurers Steve White, head of compli- regulator’s job to ensure firms have not fulfilled regulatory ance and training at the British selling products are compliant.

Tony Cornell reports on Kazakhstan Expo gains CII accreditation Insurance Company’s half-year results andoutlookfortherestof2010 he Chartered Insurance In- come almost 100 exhibitors Tstitute has confirmed that who will do business with Agenda p22 the Broker Expo has received hundreds of brokers in a big- official accreditation as the 2010 ger hall, with an improved event opens for registration. ‘business zone’, expert-led Thepaneldebatestheimpact Attendance at the four expert- workshops, unparalleled net- of the coalition Government on led workshops can be counted working opportunities and the the insurance industry as part of brokers’ continu- ever-popular ‘chill-out zone’. ous professional development Our interactive workshops Power hour p26 requirements should they are designed to be job use- Technology consider it relevant to their pro- ful, deliver practical advice and fessional development needs. help all attendees to develop This month’s Reportage Martin Friel ventures North West Now in its sixth year, Bro- and grow their businesses. assesses how technology and asks whether Manchester’s ker Expo returns to the Free to attend, and open to Leeds influences the market supremacy could be challenged Preston Ricoh Arena, Coventry on 4 all delegates, the workshop and asks whether brokers Wigan November. programme runs throughout Regional review p44 Liverpool Manchester ▲ The 2010 event will wel- Story continues on p4 aremakingthemostofit Write a will, change your name, let the flat, appeal a ticket, create a pre-nup, apply for probate, sell a horse, get divorced...

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Insurance Age Editor Martin Friel Moneyextra.com sells up and 020 7316 9732 [email protected] News editor Louise Meeson 020 7316 9867 surrenders to rival aggregators [email protected] Senior reporter Liz McMahon former Moneyextra managing director, May, said he was brought in to trans- 020 7316 9115 By Louise Meeson Richard Mason, previously Moneysu- form the business into a broader-based [email protected] permarket.com director, who left quietly financial solutions provider. Group editor-in-chief Anthony Gould rice comparison site Moneyextra. in September 2009. In January of the Referring to the sale, Mr Moat said: 020 7316 9374 [email protected] Pcom has ﬁnally admitted defeat in same year, Mr Mason said he intended “It’s not a great surprise, if you look at Production editor Ruth Ganthony its bid to compete with the UK’s top to push the aggregator to become the the market there’s a concentration of 020 7316 9717 four aggregators after the company was second largest price comparison site in comparison sites with three or four that [email protected] sold for £1. the country, behind Moneysupermarket, spend a huge amount on advertising. An Online sub editor, insurance Tracey Jones As reported by Insurance Age online in three years and eventually becoming environment like that is challenging. 020 7316 9795 [email protected] (www.broking.co.uk/1723883), debt the country’s biggest (Insurance Age, “We are not trying to go head to Sales manager James Murray management firm Fairpoint Group has January 2009, p16). head with those organisations but to 020 7316 9296 bought the site for an initial consid- However, after the Fairpoint deal was distribute in a different way by provid- [email protected] eration of £1, with a further £1m of announced, a spokeswoman for Mon- ing a personal financial review leading Sales executive Chris Finnegan 020 7316 9632 working capital being made available in eyextra said it was difficult to compete to the recommendation of products,” [email protected] the current financial year to pay credi- with price comparison sites such as he added. Commercial director Phil Davison tors and support growth. Moneysupermarket, adding that with Mr Moat explained that rather than 020 7316 9215 But Fairpoint stated that on comple- the investment it now had it was confi- just offering customers a debt man- [email protected] tion the directors expected the ultimate dent it would grow. agement plan or individual voluntary Head of key accounts Sajeeda Merali 020 7316 9765 consideration, dependent on the future Commenting on the deal, former arrangement, which dealt with the [email protected] earnings of the business, would be Direct Line MD, Chris Moat, who symptom, it wanted to get to the root Group production manager Lorna Graham about £8m, despite the fact that for the joined Fairpoint as chief executive last of customers’ problems. 020 7316 9707 19 months ending 31 September 2009, Digital production manager Rebecca Yegliss Moneyextra recorded an operating loss 020 7316 9228 For the latest online news of £1m on revenue of £3m. [email protected] www.broking.co.uk/category/technology Art director Nicky Brown The move follows the departure of Head of marketing Ro Osborne 020 7316 9185 [email protected] Head of events Simone Broadhurst Workforce slashed to balance declining motor book 020 7316 9055 [email protected] roker Direct has made 50 redun- instances we perhaps hardened our rates carrier’s, no one can work with an Audience development manager Sarah Smith Bdancies in a bid to compensate for ahead of the rest of the market.” unprofitable account forever.” 020 7968 4648 the loss of one ﬁfth of its personal lines He argued that this would put the He revealed that the company had [email protected] Publisher Alex Broad motor book. company in a better position to effect shed approximately £20m from an 020 7316 9382 Terry Stanley, chief executive of the an earlier recovery but conceded that it overall book of £100m but that he was [email protected] Bolton-based firm, said the drop in inevitably impacted competitiveness. in negotiations with providers to make Group publishing director Derek Peck business volume was a result of the “It is a very price-driven sector and up that shortfall. Managing director Graham Harman company hardening its motor rates if you move ahead of the market you “We are working on additional deals Insurance 360 principal Peter Joy 020 7316 9814 ahead of the rest of the market. are going to lose volume. This is a with potential new carriers that will see [email protected] “These redundancies affect virtually short-term reduction but we had to volume restored in 2011. In the end, Insurance 360 research assistant Chris Wade every area of our business,” he said. cut business costs in line with that vol- you can’t carry passengers,” he said. 020 7316 9106 “The motor market has been very ume,” added Mr Stanley. “The business we are writing is profit- [email protected] difficult for some time now and we very “This is part of a deliberate strategy able but is at lower volumes. As the rest For subscription enquiries, contact: Incisive Media much wanted to restore profitability to to get the book working for profit. of market implements rate increases our (c/o CDS Global),Tower House, Sovereign Park, Market Harborough, Leicestershire, LE16 9EF all areas of our motor book. In some From our point of view and the competitiveness will be restored.” Tel: 01858 438 421 Email: [email protected] Annual subscription: £150 For reprints & e-prints enquiries, contact Richard Coury, The Reprint & Licensing Centre. 4 Ingate Place, London, SW8 3NS.Tel: 020 7501 1086 Email: [email protected] Contenders for 2010 UK Broker Awards revealed Insurance Age is published monthly by Incisive Financial Publishing Limited, 32-34 Broadwick Street, London he shortlist for the 2010 UK Bro- Last year’s event year, will take place at The Brewery, W1A 2HG, UK. Tel: 020 7484 9700 Fax: 020 7316 9313 ker Awards has been announced so Chiswell Street in London on 10 Printer: Headley Brothers, Ashford, Kent T All rights reserved: no part of this publication may be it’s time to celebrate the best of British September and will be hosted by reproduced, stored in a retrieval system, or transmitted in any form or by any means, electrical, mechanical, in the broking sector. comedian Alun Cochrane. photocopying, recording or otherwise, without the prior The Young Broker of the Year cat- Don’t miss your chance to support written permission of the publisher. © Incisive Media Investments Limited ISSN 0142-6265 egory will be battled out by Andrew your colleagues and network with key Member of the Audit Bureau of Circulations. Blackburn of Marsh, Charlotte Han- industry figures at the biggest bro- Average net circulation for the period 1 July 2008 to 30 June 2009: 15,880 nah of Kwik Fit and Phil Horner of ker award ceremony of the year. To Lockton. book tables contact Jasmin Sangha at In the runing for Intermediary of [email protected] or the Year are Autonet Insurance, Blyth Congratulations to everyone who on 020 7004 7560. Valley, Caunce O’Hara, Morrison Insur- has been shortlisted. The full shortlist is available at ance Solutions and Thomas, Carroll. The event, which is in its 17th www.ukbrokerawards.com www.broking.co.uk August 2010 Insurance Age 3 News

NEWS IN BRIEF Industry anticipates further IPT The board of Brit Insurance Holdings has confirmed that private rises to catch up with EU levels equity house Apollo has submitted a revised indicative proposal to acquire concerns over the transitional arrange- the entire issued and to be issued By Liz McMahon ments around the changes to IPT. “It’s ordinary share capital of the company not as simple as saying you have six at a price of £10.75 per share in cash. ndustry experts have warned of fur- months notice of an IPT change – what The indicative proposal is subject to Ither Insurance Premium Tax (IPT) about the long-term products that have a number of pre-conditions, which hikes as the Government attempts to already been written?” he asked. may be waived by Apollo, including bring UK tax levels into line with the John Harrison, Cullum Capital Ven- satisfactory completion of confirma- rest of Europe. ture’s sales and marketing director, tory due diligence. The announcement Steve White, head of compliance and said the new Government had “missed came as the insurer reported a 12.2% training at the British Insurance Bro- a trick” in not taking the chance to increase in profit before tax, excluding kers’ Association (Biba), said: “As time increase IPT further in its emergency the effect of foreign exchange on non- moves on we could get to a position Budget as several small increases would monetary items, to £72.8m for the first where we come into line with Euro- be unpopular with brokers and create six months of 2010 (H1 2009: £64.9m) pean Union levels of IPT. The UK rate Stave White at this month’s power hour administrative problems. and profit before tax of £77.5m (H1 of IPT is very much at the low end of “People are going to end up having 2009: £8.7m loss). the European scale. 19% while in its emergency Budget to do things five times instead of once. “Any changes to direct taxation, in June, the coalition Government “IPT is a service and there are lots of The top five stories on Insurance which is what people view IPT as, increased the standard rate of IPT in services out there. VAT applies to an Age’s website www.broking.co.uk for aren’t going to be popular but are fairly the UK by 1% to 6% and the higher rate incredible amount of them. We should 1-27 July 2010 were: easy to do. So we could be in for several from 17.5% to 20%. be subject to taxation on service the 1. ‘FSA fines broker network director for years of small increases.” In this month’s Insurance Age power same as anyone else,” he argued. PPI failings’ IPT in Germany is currently set at hour (p26-27), Mr White also raised See power hour on page 26 www.broking.co.uk/1721731 2. ‘FSA unveils transformation timetable’ www.broking.co.uk/1722596 UtleyquitsIAGtofocusonhisowninvestments 3. ‘Ink makes offer for Westinsure’ www.broking.co.uk/1724167 eil Utley has revealed his inten- the UK to take up the role on 1 Sep- and its underwriting arm Advantage 4. ‘The British Insurance Awards 2010 Ntion to return to his entrepre- tember, with Mr Utley remaining until for £140m in 2006, sold the compa- – winners round up’ neurial roots after quitting his role as the end of that month. nies via an MBO for a fraction of its www.broking.co.uk/1721436 chief executive of Insurance Australia Mr Utley said it was “not a decision original cost for £23.5m just before 5. ‘Halliwells files for administrator’ Group’s (IAG) UK business. I took likely” but admitted he was not Christmas in 2008. www.broking.co.uk/1719480 Mr Utley claimed he had always a “corporate man”, preferring a more In addition, its former branch net- planned to exit IAG after his three-year hands on approach. work – comprising Equity Insurance How much have your FSCS fees risen contract, which ended in January, was “I want to spend my time on busi- Brokers and Open and Direct – which this year? up and that after the insurer announced nesses I own or invest heavily in,” he Mr Utley and his team had spent years it was ploughing $365m (£207m) into added. building up, was sold to Swinton for 500%+ 20% its UK claims reserves following a “sig- He revealed he was investing in a man- £50m. IAG bought Equity Insurance nificant deterioration” in UK claims agement buyout (MBO), although said Group for £570m after the Hastings 750%+ 10% experience (www.broking.co.uk/ he was unable to reveal further details at and Advantage acquisitions in 2006. 1652038), it was the ideal time to the time Insurance Age went to press, The deal came 18 months after Mr 1000%+ 30% hand over the reins to a new leader and would continue his involvement Utley led an MBO of the group. The who could take the business forward. with Hastings Direct and Advantage, in insurer retained Equity Red Star, Equity Doubled 10% Ian Foy, currently CEO of IAG’s which he is a “minority shareholder”. Direct Broking and broker Barnett & New Zealand business, will return to IAG, which bought Hastings Direct Barnett, which it purchased in 2008. 250%+ 10% No change 20% Sign up to improve your professional development

Keep your eyes peeled for the new Continued from front page WHAT WILL THIS YEAR’S EXPO WORKSHOPS PROVIDE? Insurance Age blog, which is set to the day alongside the exhibition. Top- appear on the magazine’s website www. ics and facilitators are hand-picked to l Expert advice on how to get the most out of your brand and how to utilise broking.co.uk during the coming weeks. ensure you take away the most relevant all marketing channels at your disposal The weekly blog, which will be written advice for your business. l A concentrated session guiding brokers through the regulatory minefield by the whole Age team, will comprise of To keep yourself updated on what covering threshold conditions and solvency and a round-up of client general comment on industry issues as is coming up at the 2010 Broker Expo money requirements well as titbits and gossip from the brok- and to register your attendance at the l Practical sales advice for brokers to ensure they sell themselves to clients ing community. If there are any burning event, go to www.brokerexpo.co.uk in the most effective way and advising on best practice for arranging client issues that you feel we should address Look out for additional updates meetings and brokering deals contact Insurance Age news editor, Lou- as they happen on our Broker Expo l A thorough guide for brokers on how to best spot those potential business ise Meeson, on 020 7316 9867 or email LinkedIn page and follow us on Twit- wins in tough economic times and what political change could mean for [email protected]. ter at brokinglou and brokingliz. your business

4 Insurance Age August 2010 www.broking.co.uk

News

NEWS IN BRIEF Quinn impact: solicitors’ PI DAS Legal Expenses has confirmed the departure of its head of underwrit- problems affecting all firms ing, Mike Timmons, citing “personal reasons” as the explanation behind that are unable to get cover, adding the move. A spokesman for the legal By Louise Meeson 2009sawa163%increase that insurers were likely to impose pre- expenses insurer said that Mr Timmons inthenumberoflawsuits mium increase of between 5-20%. against solicitors had returned to his native Cheshire rofessional indemnity (PI) premi- Janine Parker, head of solicitors’ PI at where he is expected to continue his Pums for small ﬁrms are set to soar Marsh, said for firms with five partners career in insurance. The spokesman by up to 30% following Quinn Insur- or less, premiums were set to rise by admitted that Mr Timmons’ departure ance’s withdrawal from the market. up to 30%. had been unexpected and said that Sandra Neilson-Moore, Marsh’s Ms Parker revealed that Marsh was DAS “was in no rush to make a perma- European practice leader for law firms’ currently developing an insurance nent appointment”. Matt Frost, strategy PI, said that for the first time ever what solution for firms with two or three and products manager, has stepped in was happening in the smaller end of the partners, which would be backed by as acting head of underwriting. solicitors’ PI market was affecting the two insurers that were already operat- larger firms. which covered 2,911 firms, she said: ing in the larger end of the PI market. The Association of British Insurers She said a number of factors includ- “Small firms will find cover but they Ms Neilson-Moore said there were (ABI) is on the hunt for a new director ing Quinn’s withdrawal from the will pay more for it. Some will be good 11,000 firms in the UK and that 85% general following the announce- market, an overall reduction in capacity firms that appeal to insurers but quite a of those had less than five partners and ment that Kerrie Kelly has stepped and growth of the Assigned Risks Pool few will end up in the ARP.” 40% were sole practitioners. down. According to the ABI, Ms Kelly, (ARP) were to blame. She said that larger firms would end “In this group there are many great who was formerly executive director Ms Neilson-Moore pointed out that up paying more in order to facilitate firms but there will be a minority that and chief executive of the Insurance there had been a 163% increase in the the growth in the ARP, which typically experience big problems this year,” Council of Australia, quit her role for number of lawsuits against solicitors, caters for firms of four partners or less she warned. personal reasons after just six months with 210 claims launched against firms in the post. Maggie Craig has been in the High Court in 2009, up from 80 For the latest industry news named as interim director general in 2008 and 31 the previous year. www.broking.co.uk/category/commercial — her second temporary stint in the Referring to the withdrawal of Quinn, role, after taking up the reins following Stephen Haddrill’s departure in November 2009. Jackson consultation slated for leaving brokers in dark Industry experts have warned that xperts have criticised the Govern- adding that the Government would be and picking parts out will water down small financial services firms face the Ement’s Jackson review consulta- reviewing the Legal Services Board’s what Jackson was trying to achieve. brunt of the Government’s planned tion, claiming it has left the industry levy report, also due in autumn, to “Depending on what strands are regulatory reforms following reports “in the dark” on key measures. inform its position. focused on, we could end up with that the move could cost £100m. Mark In a written ministerial statement In a statement, law firm Browne more costs involved. There is a fear Coronna, managing director Europe before Parliament last month, Justice Jacobson said that while it was reas- that the Government may choose to at Wolters Kluwer Financial Services, Minister Jonathan Djanogly, said the sured by some of the Government’s focus on measures that are easy to said: “The impact of the new regula- consultation on Lord Justice Jackson’s proposals, it had “left us in the dark process and shy away from those that tory structure will be felt by all but Review of Civil Litigation Costs would when it came to non-personal injury require primary legislation.” in particular smaller firms in financial begin this autumn with a specific focus claims and legal expenses insurance”. As reported in Insurance Age (Febru- services. They have the same strenuous on the reform of conditional fee agree- This concern was echoed by Karl Parr, ary 2010, p1) Lord Jackson’s report reporting and compliance requirements. The Government will also Groupama’s head of large and complex included recommendations for a ban ments as their larger counterparts, but seek opinion on alternative funding loss: “Lord Jackson worked hard to bal- on personal injury referral fees, the with fewer resources to comply.” arrangements such as damages-based ance his proposals and if certain items introduction of one-way cost shifting, agreements or ‘contingency fees’. get introduced in isolation then we will making after-the-event insurance premi- Select & Protect has entered into an The abolition of referral fees will lose that quality. I would like to see all ums and success fees irrecoverable and exclusive partnership with Peter Alan not be considered, with Mr Djanogly aspects of the report being considered greater promotion of before the event. Financial Services (PAFS), acting as the sole provider of general insurance to its members. PAFS is the financial services division of Welsh estate NIGexittohavemassiveknock-oneffect agency Peter Alan Estate Agents, bout 3,000 brokers will be affect- sonal lines, said: “Like any commercial unlikely to sustain a sufficient level of which is owned by the Principality Aed by NIG’s decision to exit the organisation, we constantly review each profitable growth to meet our business Building Society. Paul Firkins, sales personal lines market and focus solely of our product lines against a rigorous requirements. As NIG is well respected director at Select & Protect, said: “We on commercial business. set of criteria for future growth and by brokers in the commercial market, are delighted to offer Peter Alan mem- A spokeswoman for NIG said the profitability. Our commercial business we are keen to now concentrate all of bers our full range of home insurance, move impacted 280 sales and service is performing and growing well and our efforts on this side of the business. mortgage payment protection insur- staff but that any potential headcount we have invested heavily in product “This proposal may regrettably affect ance and added value products on an changes had yet to be decided, adding development, service and underwriting a number of roles within the personal exclusive basis and look forward to that a consultation period of up to 90 in the past 12 months. lines teams. As such, we have begun a further strengthening our already suc- days had begun. “However, the assessment of our process of collective consultation for cessful relationship with them.” Ben Thornton, head of NIG per- personal lines business suggests it is those individuals impacted.”

6 Insurance Age August 2010 www.broking.co.uk Your senior partner in PI insurance

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NEWS IN BRIEF NewInkMDmakesmarkwith CBG has confirmed the departure of director of insurance operations surprise bid to buy Westinsure Stephen Darcy. Insurance Age also understands director of insurance that Westinsure’s attributes, combined broking division, Karen Mercer, has left By Martin Friel with our own underwriting capabilities the firm, although CBG has refused to and access to markets, would create confirm or deny this. When Insurance iles-owned Ink Underwriting has the perfect partnership for existing and Age revealed Mr Darcy’s departure Gmade an offer to acquire the en- future members. (www.broking.co.uk/1720506), the tire share capital of South-west broker He said that the network’s day-to- Manchester-based broker refused to network, Westinsure. day activities would remain unchanged comment for “legal reasons”. However The surprise move comes just five as would the Westinsure brand: a spokeswoman for CBG later said: “The months after former Provident man- “We are looking forward to the company announces that Stephen aging director, Mike Smith, joined the opportunity of working closely with Darcy’s day-to-day responsibilities have underwriting firm. the members to develop new insurance been taken over by Mike Askew, the Commenting on the proposition, products and services that will continue company’s group managing director Mr Smith, MD of Ink Underwriting, Westinsure along its path to create a with immediate effect.” said: “For a long time, Westinsure has market-leading network.” been regarded as a unique network as Mr Smith would not reveal how Chris Hanks, general manager of it is made up of quality local brokers much Ink was prepared to pay for the commercial insurance at Allianz, has that wish to remain independent and Mike Smith: Sees a number of synergies network but when Broker Network was been elected president of the Char- provide a quality service, with secure in takeover discussions with Westinsure tered Insurance Institute (CII). He takes insurers, to their local business com- and for the benefit of its members, several years ago, it was rumoured that over from Barry Smith, chief executive munity. The management team at Ink allowing them to continue to trade a figure around £10m had been dis- of Fortis UK. Elected as deputy-presi- share many common values and we competitively in the future. The com- cussed. Market sources suggest that in dent alongside Mr Hanks was Julian see a number of synergies in the two bined premium of Westinsure and Ink the current market, Westinsure would James, CEO of Lockton International. businesses coming together.” would help both parties achieve their not be able to realise that value. Mr Hanks said: “It’s a great honour to Max Hardman, CEO of Westinsure, respective goals and increase their mar- The offer has been put to Westin- take the presidency of the CII and par- commented: “Westinsure was keen to ket presence.” sure’s shareholders for consultation and ticularly in the run up to the centenary find a solution to introduce additional Mr Smith added: “We have looked approval. This had not been secured at of our Royal Charter in 2012.” schemes and trading methods quickly at a number of networks but believe the time of going to press. Broker buying spree continues rokers began the second half of 2010 MRIB said that the acquisition added Bin a ﬂurry of acquisition activity with £4m in gross written premium to its Bridle Insurance snapping up two buys pre-acquisition level of £25m, adding and further purchases from MRIB and that JN Dobbin’s book of business Cullum Capital Ventures (CCV). and eight staff, all of whom are being Following June’s acquisition of retained by MRIB, will transfer from Swansea-based broker Associated Beaconsfield to High Wycombe. Householders Services, Bridle has According to MRIB’s MD, Ed Finch, bought Southampton Insurance Serv- the two companies “fit together very, ices (SIS) and Leicestershire-based very well”. He stated that in addition to Abbot Insurance, which specialises in the book of business the deal provided niche personal lines insurance, both for cross-selling opportunities in areas such six figure sums. as directors’ and officers’ and private The current SIS managing director, motor and further organic opportuni- Phil Shephard, and his team will relo- ties with MRIB able to provide strategic cate to Bridle’s Southampton Centre. guidance and the budget to implement The broker said that SIS had strong the staff’s expansion ideas. contacts in the sports insurance arena, Finally, CCV completed its fifth being able to cater for both personal acquisition of the year with the pur- and commercial insurance, including chase of Newcastle-based broker hard-to-place sports-related risks such Bishop Skinner, which controls £12m as concerts at sports stadiums. worth of premium. High Wycombe-based commercial Current MD, Don Jones, will continue and high-net-worth broker MRIB to lead the firm and the existing senior bought local rival JN Dobbin for an management team will have an equity undisclosed sum. stake in the business going forward.

For the latest takeover news www.broking.co.uk/tag/acquisitions

8 Insurance Age August 2010 www.broking.co.uk News

Unsustainable motor rates see NEWS IN BRIEF Barlow Lyde & Gilbert (BLG) has greatest increase in 16 years confirmed its takeover of the Man- chester-based insurance practice of Trevor Cutts, business development According to the AA index, for an Halliwells while Hill Dickinson has By Louise Meeson director at 1 Answer Network, said the annual comprehensive car policy the acquired Halliwells’Liverpool and Shef- rise “came as no surprise”. ‘shoparound’ premium, an average of field operations. As part of the BLG deal, ar insurance premiums have rock- “Insurers have been long complain- the three cheapest quotes for a given 17 partners moved immediately with Ceted at a record rate as insurers at- ing that premiums were being slashed risk, had increased by 11.5% during Q2 a significant number of other lawyers tempt to move their motor books back too low to be sustainable and we are to £704. The shoparound average for and support staff to follow. The main into the black. now seeing the result. Financial Serv- policies sold through price comparison focus of the new team is catastrophic According to the latest AA British ices Authority-collated figures show sites rose even more sharply by 12.7% injury, fraud, regulatory and public sec- Insurance Premium Index, premiums average private car insurer costs of £122 while shoparound premiums for third- tor work. They will integrate with BLG’s rose by more than 11% during the for every £100 of premium received in party, fire and theft cover climbed by existing casualty and healthcare team, second quarter – the sharpest increase 2009, which is just not sustainable 15.9% and by 17.1% on the price com- which already has a presence in Man- since the benchmarking study began given insurer’s lack of reserves and parison site shoparound index. chester following BLG’s establishment 16 years ago. investment income,” he added. Edmund King, AA president, said: of an office in the city in 2009. In addition, the Confused.com and He slammed practices such as “sub- “For those shopping on comparison EMB quarterly Car Insurance Price net pricing” by brokers that he said were sites, average premiums have climbed Insurance broker LJM Partnership Index revealed that the average cost of “using claims farming as cash cows to by 32.8% in just nine months.” has relocated to Bredbury after making a comprehensive car insurance policy subsidise the losses” and were “manipu- “Last year, the cost of meeting claims three senior hires. The broker, previ- rose by 14.2% during the same period lating the market, increasing claims and exceeded premium income by 22% and ously based in Marple, said it required and that prices had increased by 31% in administration costs and pushing the the spiralling rises show that insurers are larger premises to house its growing the 12 months since July 2009. industry towards raising premiums”. trying to fill that chasm,” he added. team and to put the business in a good position for further expansion into niche sectors in Manchester and the Arag service comes out on top in LEI questionnaire North West. Former assistant director at BNIB Priestly, Paul Winterburn has rokers have voted Arag the best le- Brokers reported Arag employees to and that it proved well organised and taken on the role of sales and market- Bgal expenses insurer (LEI) in terms be “helpful”, “instantly responsive”, proactive on renewals too. ing partner. Kate Mellor has joined from of overall service in a survey by Insur- “pragmatic”, “highly knowledgeable”, In the family/household, motor and the Bollington Group as technical sales ance Age’s sister industry insight unit “open-minded” and “accommodating commercial markets, brokers described partner. New account handler David Insurance 360. and flexible in their approach to do Arag’s offerings as “quality products Wells has joined the team from Country In the survey, which focused on the business with us”. at sensible prices”. On claims han- Insurance Consultants. five most-used LEIs – Abbey Legal, Mr Joy said reviews of Arag’s legal dling it ranked just behind MSL but Allianz Legal Protection, Arag, DAS documentation and legal advice service feedback was still good with manage- The Financial Services and MSL – four of the five main pro- varied but brokers found its online ment “always ready to become involved Compensation Scheme’s (FSCS) annual viders proved to be fairly comparable. quotation system quick and efficient should the need arise”. report and accounts for 2009/10 has However, Peter Joy, principal of Insur- 85% revealed that in excess of £204m ance 360, said that Arag was “something 80% has been paid out in compensation of a revelation”, scoring 80% for overall to more than 21,000 claimants. Two service while on underwriting skills, 75% thirds of the compensation paid documentation, legal advice and quality 70% during the year was for payment pro- of cover it did even better. tection insurance (PPI) and investment 65% In terms of overall service, MSL came claims. The FSCS said PPI claims had second to Arag with 72% followed by 60% increased significantly during the year Allianz Legal Protection with 71%, rising to more than 2,400, and that it 55% DAS with 69% and Abbey Legal Pro- Arag MSL Allianz DAS Abbey Legal expected the number of claims in this tection with 67%. Overall service of legal expenses insurers, according to an Insurance 360 survey area to continue to grow in 2010/11.

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FSA consultation kicks off with NEWS IN BRIEF Three European independent confirmation of 2011 revamp insurance brokers SIACI Saint Hon- ore (S2H), Greco Group (Greco) and from the end of January. That will run Ecclesia Group have joined with Jar- By Louise Meeson for about a year and we are aiming for dine Lloyd Thompson (JLT) to sign an a go live date of about late June 2012.” exclusive trading agreement. JLT will he Financial Services Authority Mr Nelson said there was still much take a 20% stake in Greco, subject to T(FSA) has revealed it will begin to be decided: “It’s not about just carv- regulatory approval, a company in its radical transformation at the start of ing up the FSA; it’s also changing some which Ecclesia already has a 13.3% next year as it launched a consultation of the landscape,” he added. shareholding. In addition, JLT con- into the shake-up. “There is no indication there will tinues to hold its long-standing 20% As previously announced by Chancel- be any change in policy or regulatory shareholding in S2H. The trading lor George Osborne, the Government approach, it’s merely a separation of agreement encompasses compatible plans to break up the current tripartite powers.” branding and mutual development system of financial regulation by 2012. Mr Nelson said that in the past there of all insurance, reinsurance and The Bank of England will be given had been 11 regulators and that one of employee benefits activities, including a strengthened role and a Financial the virtues of having two separate regu- shared technology, for the benefit of Policy Committee and two new regu- George Osborne announced plans to latory bodies was that both priorities clients across all industry sectors. lators will be created – the Prudential break up the current tripartite system could co-exist, both consumer protec- Regulatory Authority (PRA), which tion and prudential regulation, without RSA has acquired Irish personal will sit within the Bank of England, and Speaking ahead of the consultation one overriding the other. lines provider 123 Money for €65m the Consumer Protection and Markets launch, at a recent meeting of the All He explained that the aforementioned with a further deferred element linked Authority (CPMA). Party Parliamentary Group on Insurance consultation would be complemented to future performance targets. The The Treasury launched its formal con- and Financial Services, Lyndon Nelson, by separate consultations by the Min- company offers motor, home and pet sultation on the plans, ‘A new approach director of risk management at the FSA, istry of Justice on the formation of an insurance and, with around 170,000 to financial regulation: judgement, focus said: “We will reorganise internally to Economic Crime Agency and another policyholders, generated annual pre- and stability’, on 26 July. The consulta- match the structure that they want to on consumer credit, although timeta- mium income of about €60m (£50m) tion will close on 18 October. introduce with the PRA and CPMA bles have not yet been decided. up to March this year. The acquisition makes RSA the second largest general insurer in Ireland. Simon Lee, chief exec- Value of fraudulent casualty claims could outstrip motor utive of RSA International, said: “The acquisition complements our existing n what it claims is an insurance in- for crash’ fraudsters. However, these encouraging insurers to share data. intermediated distribution capability by Idustry ﬁrst, Allianz has established organised gangs are moving into other He said Allianz had identified in giving us a leading direct presence.” a specialist casualty claims validation areas,” he added. excess of £10m worth of casualty team, which it predicts could identify Mr Pandya said it was much more fraud in the past six months and that Davies Group has reported a rise in up to £15m of fraud next year. difficult to stage a motor accident than next year he expected up to £15m to profit after tax to £2.8m (2009: £1.7m) Mihir Pandya, Allianz fraud man- a ‘slip and trip’ incident. be detected. on a turnover of over £30m for the ager, said the insurer had experienced He said that the insurer began pilot- “The value tends to be the main financial year ending 31 March, 2010. rising levels of suspicious employers’ ing the team about six to eight months driver behind this. Casualty fraud is The number of claims handled by and public liability claims and that the ago and that during this time it became quite simple to commit when com- the group increased by 44% over the team had been formed to tackle this clear that casualty fraud savings would pared with motor and there is a high same period and 175 new jobs were increased fraud threat. eventually be higher than those made return attached. created. In a statement, Davies said “If you look at the motor arena by the motor fraud team. In its recently-released fraud figures that its executive leadership team had there’s much better data available and “Casualty fraud is a bigger threat for 2009, the Association of British been significantly strengthened with a the sharing of information is work- even than motor,” he said. Insurers revealed that many of the number of hires including the appointing well. The Insurance Fraud Bureau Mr Pandya called on the IFB to sup- 8,500 dishonest liability claims exposed ment of Charles Crawford from RBS (IFB) is dealing well with the ‘cash port the fight against casualty fraud by involved bogus personal injuries. Insurance as chief executive.

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FP5969/01/10/v1 News

Biba urges Amii to join forces NEWS IN BRIEF The Healthcare Insurance Group to form a single ‘louder’ voice (THIG) has settled a High Court action taken out against former appointed could collaborate had been identified. representative Andrew Tomkins. Mr By Liz McMahon The Amii/Biba PMI panel currently Tomkins resigned his position in Janu- meet on a quarterly basis and Mr Payne ary 2010 and THIG commenced legal he Association of Medical Insur- admitted there was room to develop proceedings, including obtaining Tance Intermediaries (Amii) has the relationship further but insisted: “I an injunction, to restrict Mr Tomkins rebuffed advances from the British In- still think our members would like us to from contacting its clients and using surance Brokers Association (Biba) to maintain our separate identity.” confidential information, and sought merge the two organisations. At the last meeting of Biba’s Health- damages. The group also took action “Amii needs to be aware that a sin- care Insurance Focus Group claims against Mr Tomkins’ new principals, gle voice is desired and to achieve the transparency was identified as an issue KGJ Insurance. The parties have critical mass necessary it needs to join of paramount concern. agreed to pay a substantial sum to Biba properly,” said head of technical “This is not a new issue but it is THIG and the legal action has been services at Biba, Peter Staddon. becoming an increasing problem at the dismissed. “No disrespect to the organisation heart of any conflict that exists in the but it does represent a small number Peter Staddon: “Biba can shout louder” sector and one that must be addressed Westfield Health has launched an of brokers and doesn’t have a very loud before it can move forward,” Mr Stad- online health insurance product avail- voice. Biba can shout louder and join- technical private medical insurance don explained. able direct to consumers. Westfield ing us does not mean Amii will lose its (PMI) knowledge we can offer. We As reported in Insurance Age said Health365 offered healthcare own voice,” he said. have also invested time and energy (November 2009) this is a debate that benefits that could be used every However, Michael Payne, general sec- in training and have worked with the Amii has struggled to resolve amica- day as well as cover for unexpected retary of Amii, said, while he respected Chartered Insurance Institute to pro- bly. In order to hold a meeting with healthcare costs. It had been the way Biba had lobbied Government, mote professionalism.” private medical insurers last year, the designed to target those who did Amii also had its strengths. He said that former chairman, Mike association was forced, under insurer not currently have any health cover. “Ours lie in the relationships we have Izzard, had started a dialogue with Biba pressure, to keep the issue of sharing According to research from the com- with our members and the in-depth and that areas where the two bodies claims data off the agenda. pany, 96% of those questioned said they would be happy to purchase health cover online and 40% used to have private medical insurance and Fears white paper proposal could hamper PMI missed the extra security it provided. he coalition Government’s decision could lead to an expansion in private that the industry would have time to Tto turn its back on its ‘preferred pro- hospitals and independent treatment adapt accordingly. Pulse has launched an insurance vider’ policy could pose a threat to the centres, he added that it could threaten “Our role is to be there for people policy for HIV sufferers offering up private medical insurance (PMI) industry, the PMI sector. who want choice now. We still have a to £200,000 of accidental death according to the Association of Medical “The threat to PMI is people may lot of work to do to convince the public cover and either £10,000 or £25,000 Insurance Intermediaries (Amii). start to think, ‘if I can access private of the benefits of PMI. Insurers have to life cover. The policy, which is called Health white paper, Equity and Excel- facilities through the NHS, why do I unite to achieve this,” he added. Harbour and underwritten at Lloyd’s, lence: Liberating the NHS, recently need private cover?’ There is a challenge The Government has now entered includes a term of cover of 10 years published by health secretary Andrew here for health insurers to come up with a period of intensive consultation fol- and is available to all UK citizens. Paul Lansley, included the proposal to per- offerings that build on what the NHS lowing the publication of a number Sandilands, managing director of mit “any willing provider” to deliver can offer rather than seeing themselves of documents to seek views on more Pulse, said: “A person living with HIV is healthcare services. as a replacement,” he added. detailed propositions. The closing date entitled to be able to provide for their While Michael Payne, general secre- Head of healthcare at Groupama, for submissions is 5 October and the family and dependants without worry- tary of Amii, welcomed giving patients Alistair Sclare, said that due to the Government has stated its intention to ing about jumping through hoops or more choice over their treatment, stat- sheer size of the NHS, any eventual start offering more choice for patients having to undergo lengthy and intru- ing that it was an opportunity, which changes would happen gradually and from April next year. sive medical enquiries.” kdibonline.co.uk

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NEWS IN BRIEF TheFSAsendssignalofintent Durham Constabulary has arrested three men as part of an ongoing ‘crash with broker fine and insurer bans for cash’investigation. In July 2009, the police force approached the Insurance Clifford Felstead and Ralph Brunswick Fraud Bureau with insurance claim By Louise Meeson from working in regulated financial serv- paperwork highlighting anomalies and ices for defrauding Markel International suspicious links to local businesses. The he Financial Services Authority Insurance Company, QBE Insurance bureau found that the scam affected T(FSA) has ﬁned a broker network (Europe) and Amalfi Underwriting. multiple insurers. Detective Sergeant director and banned three insurance The FSA said that as well as ban- Amanda Henderson said the latest professionals for a £2m fraud in its lat- ning the three insurance professionals development followed two previous est crackdown. involved, Mr Higgins would also have arrests, part of the same investigation. The watchdog fined David Head, been fined £600,000 were it not for “We take insurance fraud very seriously director of Essex-based mortgage and the fact that he had recently been and will continue to work to tackle seri- insurance broker network FT Compli- made bankrupt. ous and organised crime,”she added. ance Services (FTCS), £10,500 for Mr Higgins was a director and founder failing to properly supervise insurance Margaret Cole: Failure “disappointing” of Surety Guarantee Consultants (SGC), Oak Underwriting has agreed a deal intermediaries he knew had close links a firm that held binding authorities with with Westinsure Group to provide high- with a firm and individual previously Margaret Cole, the FSA director of Markel and QBE, through its agent net-worth expertise to its network of disciplined by the FSA for payment enforcement and financial crime, said Amalfi, to issue surety bonds. independent insurance brokers. The protection insurance (PPI) failings. Mr Head’s failure was particularly dis- The FSA said that SGC wrote busi- tie-up will provide Westinsure members The FSA explained that FTCS oper- appointing as he was on notice that ness that exceeded its authorised limits, with access to Oak’s household and ated as a network, recruiting mortgage two of the ARs had links with a person exposing Markel and QBE to greater motor products High Value Home and and insurance brokers as appointed previously disciplined for PPI failings. liabilities than agreed, made secret prof- Family Fleet. Matthew Ward, business representatives (ARs), and that Mr The watchdog added that Mr Head its and withheld over £2m that should development manager at Oak, said: Head, who was responsible for com- admitted misconduct, agreed to settle have been paid to the insurers. “This development will allow us to pliance, failed to put in place systems at an early stage and was “open and co- It said Mr Brunswick aided the expand our distribution footprint with and controls to ensure that the ARs operative”, which meant he qualified company by providing false docu- one of the largest network organisa- made suitable recommendations, for a 30% reduction in penalty. ments and that SGC also lied to QBE tions and provide greater access to a therefore exposing customers to the In a separate action, announced on 8 about Mr Felstead’s previous convic- significant share of the market.” risk of purchasing unsuitable PPI. July, the FSA banned Timothy Higgins, tion for fraud.

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14 Insurance Age August 2010 www.broking.co.uk Risk management/claims

UK still has most uninsured NEWS IN BRIEF Insurers are detecting more fraudulent insurance claims than ever, drivers in Western Europe according to figures from the Associa- tion of British Insurers (ABI). Last year, By Louise Meeson TOP FIVE UNINSURED HOTSPOTS BY POSTCODE over 2,000 dishonest insurance claims worth more than £16m were detected 2007-09 he chief executive of the Motor In- every week. The ABI figures revealed Tsurance Bureau (MIB) has brand- 1. Barkerend, Bradford that in 2009 a total of 122,000 fraudu- ed the UK’s uninsured driving record 2. West Gorton, Manchester lent insurance claims were uncovered, “embarrassing” after it was revealed the up 14% on 2008. The value of these 3. Small Heath, Birmingham. country has the highest level of unin- claims, at £840m, rose by 14% on the sured driving in Western Europe. 4. Handsworth, Birmingham previous year. Motor insurance frauds According to the latest figures from were highest by value, with dishonest 5. Saltley, Birmingham the MIB, 4% of UK motorists are driv- claims totalling £410m uncovered. The ing without insurance despite a 20% AshtonWest:Brokershavekeyrole Source: MIB most common frauds involved home reduction in the number of uninsured insurance, with 62,000 bogus or exag- vehicles on the roads over the past four Mr West said for the scheme to uninsured drivers, with Barkerend in gerated claims detected. years from 1.8 million to 1.5 million. work, the MID must be accurate, call- Bradford topping the chart. Ashton West, chief executive of the ing for brokers to ensure any vehicle Mr West said: “The 20% reduction in Ecclesiastical has warned that up MIB, said uninsured driving was a major information submitted was correct. the number of uninsured drivers on the to four churches each day are being problem in the UK, blaming cultural as “Brokers have an important role to roads is a significant step in the right targeted by metal thieves, plus an well as regulatory factors, including the play to ensure their clients are protected. direction, particularly in key hotspots increasing number of non-faith build- fact that drivers had to be caught in the If information is incorrect, people may such as Barkerend in Bradford and ings such as schools. During the first six act before action could be taken. be contacted and accused of not insur- West Gorton in Manchester. months of 2010, Ecclesiastical received However, he pointed out that the ing their vehicle. We must work together “The level of criminal convictions a total of 945 theft of metal claims introduction of continuous insurance to mitigate that risk,” he added. demonstrate that uninsured drivers are worth more than £2.1m. The high- enforcement next year meant that unin- As part of the MIB’s Stay Insured cam- consistently being caught and removed est number of metal theft claims was sured vehicles would be highlighted by paign, it has also published its annual list from the road. But more drivers need to recorded in 2008 when, during the first the Motor Insurance Database (MID). of the UK’s top regional hotspots for buy a policy to cover them.” five months of the year, 1,382 claims worth more than £4.2m were received by Ecclesiastical. Although lead stolen Insurance industry prepares for Olympics red alert from churches still makes up the majority of claims, more than 18% were from he insurance industry has been He added that it would be extremely was impossible for the industry to pro- non-faith customers. Twarned to prepare for every eventu- difficult to forecast the impact of a ter- vide. He explained that this problem ality, including a terrorist attack, in the rorist attack or the form it could take. was “aided and abetted by the media”. Some 236,100 employment tribunal lead up to the Olympics in 2012. “Significant low-frequency events “We are captives of our own pessi- claims were lodged in the financial Speaking at the Chartered Insur- stats are very problematic. They are mism, and what the Olympics needs is year 2009/10, an increase of 56% on ance Institute’s (CII) recent Spotlight not random acts as the original cause is optimism,” he added. the previous year, according to the lat- on the London market event, Steve deliberate. Unfortunately, it is random Mr Maynard said that an event such est figures from the Tribunals Service. Atkins, chief executive at Pool Re, in who it affects,” he explained. as the Olympics provided a significant The organisation said this was largely said there was no guarantee a terrorist Paul Maynard, chief placement officer underwriting challenge, but added that as a result of the rise in multiple claims, attack would not take place as experts at Willis UK & Ireland, said that organ- floods and hurricanes were low risk which rose by nearly 90% from the cautioned that London was a prime isations involved in the event craved and the event was more likely to be previous year, but also partly as a result target and it was “a matter of when, absolute certainty that they would be brought to a standstill by the death of of the changing economic climate. not if”. covered in any eventuality, but that this the Queen. There was a 14% increase in single claims over the year.

Lloyd’s has published a new report CUE challenged by competitor database examining the systemic risks associ- new database that permits claims because they feared the way the data Our system lets insurers screen at the ated with globalisation. The report, Adata sharing while protecting com- was shared could put them at a com- front door so they can immediately see Globalisation and Risks for Business, mercially sensitive information could petitive disadvantage. who they don’t want to deal with. So examines how globalisation has challenge the position of the Claims He added that Fraudscreen, which long as the industry thinks it can fix this improved society, but also led to Underwriting Exchange (CUE). has 16 million potential fraudsters on problem with old solutions, it will lose increased political, economic, health This was the message from James its database, was the only system that more and more money,” he added. and cyber risks. Lloyd’s chairman Lord Middlehurst, director of database pro- existed that could provide a ‘blind’ A spokesman from IDSL, which Levene warned that the financial cri- vider Fraudscreen, who spoke about view of a customer, protecting insurers manages CUE, said: “The CUE data- sis was only the first example of the the company’s ambitions at a recent from sharing sensitive data. base exists purely for subscribers to systemic shocks of globalisation. The Callcredit insurance seminar. Fraudscreen started targeting the verify claims for underwriting and report called for governments and Mr Middlehurst claimed that a insurance industry at the end of 2009 claims assessment purposes on a case- businesses to work together at an number of insurers had not signed and has three insurers, including RSA by-case basis. It is not possible to use international level to predict and pre- up to the CUE database, which is and Chartis, signed up. the database as a generalised market- vent the aggregation of these risks in used by the Insurance Fraud Bureau, “Proving fraud can be very difficult. ing facility.” the future. www.broking.co.uk August 2010 Insurance Age 15 Schemes news

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PRODUCT LAUNCHES APCtorolloutportfolio RSA policy intheRepublicofIreland enhancements RSA has updated its Fleet Active offer- By Liz McMahon ing and launched new Small Business Combined (SBC) and Yacht Alliance nline underwriter APC is to make products. The insurer has introduced Oits entire product portfolio avail- a motor fleet solution to its Fleet able in the Republic of Ireland (ROI) Active offering, to allow firms to assess within the next 12 months. driver behaviour, improve driving The commercial underwriting agen- skills and protect against fraudulent cy’s shopkeepers’ and office products claims. Designed to meet the needs were launched in ROI last month and of small wholesale, manufacturing and APC said its product for takeaways and warehousing businesses, its new SBC fast food outlets would be the next product offers multiple covers under offering to be added. one package including property dam- European business development age, business interruption and liability. director, Graham Young, who joined In addition, RSA has released a special- APC from Heritage Underwriting last ist Yacht Alliance policy, designed for year, said: “We are trying to develop craft with a value between £205,000 a trend of gradually rolling out our and £12.5m. small commercial products in the Irish market on a month-by-month basis. We chose to launch our shopkeepers’ Duo extend product first due to its success in the UK and because it is a product the Irish electrical cover market is familiar with.” APC’sshopkeepers’andofficeproductswereextendedintothecountrylastmonth QBE and Bristol-based broker Sutton APC currently offers 15 products in Specialist Risks (SSR) have extended the UK and Mr Young said he expected but also many differences. We want to at these further in parallel to our work their existing insurance scheme for to eventually extend the Irish offering design products to fit with a particular in Ireland. How things develop will electrical contractors to cover heating, to cover a similar range. market, not simply cut and paste exist- depend very much on market demand.” ventilation and refrigeration engineer- As a result of creating a product tem- ing UK products. Mr Young said. ing risks for domestic, commercial plate for ROI, APC said it was also now “Our expansion into Europe will be APC said it intended to keep the and industrial clients. Chris Parker, in an ideal position to roll out its propo- fairly niche and opportunistic. We have facility exclusive to selected brokers in commercial manager of QBE’s Bristol sition in other European countries when our eye on opportunities in Eastern the ROI and Europe that wanted a Office, said: “Through our long-stand- suitable opportunities were identified. Europe and Scandinavia and will look build a long-term trading relationship. ing partnership, we have been able “We are cautious in our approach to combine QBE’s financial strength, though. Ireland was an obvious good For the latest schemes news underwriting and claims expertise with fit but it was not as easy as you might SSR’s industry knowledge and close www.broking.co.uk/tag/schemes imagine. There are clear similarities proximity to placing brokers.

PRODUCT REVIEW Broker ratings Theproductsreviewedonthispagebybrokersareratedfromonetofive,basedonthe Tradesmanproductwinsonprice Product Minimum premium l An increase in the maximum by price. This is where Groupama Optima Trade Plus None number of employees to 12 for really wins as the premiums without contracting trades and 20 for pro- any optional benefits are extremely Underwriter Excess fessional trades without referral competitive. Groupama Insurances Differs depending on cover l Online premium negotiation facil- Two significant inclusions are that ity for preferred contracting and of tax and property protection insur- Commission paid Contact professional trades ance and employment and prosecution Variable commission offered from nil Malcolm Smith, commercial lines protection, free of charge elements to 30% director Comment that really add value to the policy. Email: [email protected] Rachael Carrington of Hine Insur- The online quotation facility is Coverage Tel: 020 7264 2815 ance Brokers, comments: “In a highly simple and straight forward with an Public liability, employers’ liability, competitive market for tradesman’s excellent referral service. Commission property all risks, business inter- Key benefits liability insurance this is a top runner. up to 30% is available.” ruption, contract works, plant and l Cover for part-time workers at a At this end of the market, customers’ personal accident. reduced per capita rating decisions are predominately driven Overall rating HHHHH

16 Insurance Age August 2010 www.broking.co.uk Schemes news Trio of new schemes unveiled Mazda UK, EDB has been appointed By Louise Meeson to administer its car insurance scheme, providing fully branded policies ew schemes have been launched through Mazda’s network of 153 UK Nby Bollington, Equity Direct Bro- dealerships, as well as administering its king (EDB) and THB Risk Solutions. online quote-and-buy system. Bollington and EDB have entered The deal includes a tie-in with Equi- into affinity partnerships with Fleet ty’s existing affinity partner, Santander, Support Group (FSG) and Mazda UK which provides consumer finance to respectively while THB Risk Solutions Mazda buyers via the Mazda Financial has launched a new insurance facility to Services brand. its network brokers. Neil McCallum, Equity Direct’s rela- As part of the deal with FSG, Bolling- EDB will adminster Mazda tionship manager, said the brand was UK’s car insurance scheme ton will provide a range of insurance a “perfect fit” for its affinity business. solutions to the fleet management EDB’s existing motor manufacturer Masterserve network, which will be quality service there is a definite syn- affinities include Honda, Kia, Renault underwritten by Groupama Insurances. ergy between Bollington and FSG. and Nissan. Under the Masterserve brand FSG has Bollington has more than 30 years’ Meanwhile, THB Risk Solutions has a network of 250 garages including experience in the motor trade sector partnered with Residents Insurance service, repair and body shops. and affinity partnerships like this are Services to offer brokers that are part Bollington commercial director, in line with our strategy to continue of its network a new insurance facility, Chris Patterson, said: “As a company expanding in this area.” underwritten by Fortis, for blocks of renowned for providing its clients with As part of a three-year deal with flats and buy-to-let properties.

Allianz updates Aviva offerings NIG launches business cover revamped property policy Allianz Commercial has announced a Aviva has made enhancements to its NIG has launched its new Premier revamp of its Commercial Select prod- motor trade offering and commercial Property Owners product to a panel of uct. Amendments have been made to combined policies. The insurer said it up to 40 brokers. The insurer said it was sections on property damage, business had made its motor trade product more “seeking to redefine the level of protec- interruption, public and products liabil- flexible, offering smaller motor trade tion available to mid to large property ity, employers’ liability and money. Steve operations the ability to restrict road owning clients through the product’s Coates, head of property and casualty at risks cover to named drivers only and broad, single policy offering”, which Allianz Commercial, said: “Significant removed compulsory business premises covers property, rent, property owners’ changes have been made to ensure our cover. Changes to its commercial com- and employers’ liability, engineering flagship product remains a market lead- bined policies were made to better meet breakdown, legal expenses and terror- ing proposition.” customers’ technology needs. ism as standard. policy’s key benefits H Poor HH Average HHH Good HHHH Very good HHHHH Excellent

Product Excess nesses, which must be predominantly Executive Business £350 premises-based and involved in manufacturing, distribution and processing Underwriter Contact – but not contracting. Sterling Insurance Mark Arends To gain an edge over the com- Email: commercialnewbusiness@sterlin- petition, in addition to an ‘all risks’ Commission paid ginsurancegroup.com wording, Sterling has automatically Variable depending on account status Tel: 08456 769 991 incorporated several cover enhancements, the more worthwhile ones Coverage Key benefits being equipment breakdown and l All risks l Business continuity planning a ‘Business Continuity Software l Property damage and business l Yellowtag enables electronic items Toolkit’. Sterling maintains that rates interruption up to £50,000 to be traced after a loss or theft are keen, particularly for target trades l Equipment breakdown l Website protection and well-run companies. l Libel and slander for in-house An attractive package, which could media and publications Comment be useful for brokers that are comfort- Steve Watling, associate director at able recommending smaller insurers.” Minimum premium Bluefin, comments: “This is aimed £1,000 at small to medium-sized busi- Overall rating HHHH

www.broking.co.uk August 2010 Insurance Age 17 E-commerce

NEWS IN BRIEF Social networking opportunities Comparison website BeatThatQuote has secured a new partnership deal elude insurance professionals with MSN to set up financial price comparison site MSN Compare. The service kat.com had over 727,000 fans on will be promoted via the MSN portal as By Louise Meeson Facebook and 38,000 on Twitter. well as through search engine Bing, and Referring to the overall findings, Ms will compare prices across a range of he insurance industry has failed to Gyte said: “Insurance as a sector has more than 20 financial products as well Tjump on board the social media not really jumped on the social media as energy and legal services. The aggre- marketing bandwagon, despite grow- bandwagon. Other sectors such as fash- gator has claimed that MSN Compare is ing use in other economic sectors. ion and travel have really embraced it different from other comparison sites in That was the message of Natalie and have achieved results.” so far as it offers a range of free incen- Gyte, research manager at search She said that even the top insurance tives when users take out financial and engine optimisation consulting performers submitted less Facebook utilities products. firm Greenlight, after the company posts and tweets than in other sectors. released its latest quarterly Insurance A spokeswoman for Confused said: The Office of Fair Trading (OFT) has Sector Report. Moneysupermarket’s Omid Djalili ad “Social media is a perfect medium for launched a consultation on online According to the research, during campaign was the most interactive Confused. We can engage with our consumer protection. The strategy has the first quarter of 2010, aggregator customers and interact with them in a proposed three broad areas for action Confused.com was the most followed following the aggregator’s advertising way that isn’t possible through more to protect consumers and drive compe- insurance brand in social media, with campaign featuring Omid Djalili, was traditional channels. Consumers are tition and economic growth in online a combined Facebook and Twitter deemed the most interactive with a more interested than ever in personal markets. The OFT suggests that it could, following of more than 1,383, sub- cumulative total of 85 posts and tweets. finance and making sure they’re get- with other agencies, industry and mitting two Facebook posts and 48 Aviva.co.uk came third with more than ting the best deal, so it’s the best time consumers, work to promote business tweets per month. 1,160 followers, but did not submit any for comparison sites in particular to compliance, develop effective enforce- However, Moneysupermarket.com, Facebook posts and made 16 tweets. embrace this medium. ment and empower consumers by which came second in the social media Interestingly, Greenlight said that “I think over the next year we’ll start explaining their rights and the benefits popularity index with a following of while Comparethemarket.com did not to see some really clever uses of this of transacting online. Noah Curthoys, 1,355 Facebook and Twitter, a fig- have an official Facebook or Twitter medium coming from our industry as OFT director of strategy, said: “The OFT ure that has since risen considerably account, its affiliate Comparethemeer- we all get to grips with its potential.” is seeking to facilitate industry-led solutions to emerging problems and respond effectively to rapid change.” RSAlaunches‘cutting-edge’e-tradingservice Xchanging has signed a contract with SA has launched a new e-trad- mercial combined product had been bridge to get back to where we were the International Underwriting Associa- R ing service for brokers as part of designed to cover up to £20,000 pre- with regards to SME, and RSA Online tion of London and the Lloyd’s Market its bid to become a top three player in mium, and the small fleet facility would is the vehicle that will get us back on Association to build an e-accounts the small to medium-sized enterprise cover up to 20 vehicles ranging from track,” Mr Greaves said. capability on the existing infrastructure. (SME) arena. cars and vans to forklift trucks. The online offering is supported This will enhance the electronic submis- RSA Online currently offers shop, Mr Greaves said that by the end by RSA’s ‘e-promise’ to brokers. The sion of accounting entries to Xchanging office, small business combined and of 2010, he also hoped to launch an insurer said it had established a ‘swift by brokers and insurers. As part of the professional indemnity insurance, and online properties product, providing intervention policy’, pledging to answer contract, Xchanging will also provide a in the next eight to 10 weeks the cover for residential and commercial any broker queries within 30 minutes. carriers’ accounting entries service. As a insurer said it hoped to add commer- properties as well as blocks of flats. Alongside this, Mr Greaves said there result, the creation of premium account- cial combined and small fleet to the “We recognise that being a key player was a team of e-traders on the road pro- ing splits, which is currently done by product range. in the SME market means embracing viding brokers with technical support. brokers, will be managed by Xchanging. David Greaves, RSA SME trading e-trading in a way that is compatible The products will also be available for director, said the “cutting-edge” com- with our brokers. We need to cross a brokers via Acturis and Powerplace. EMB, the actuarial and business consultancy, has joined Teradata Cor- poration’s partner programme. Teradata said the alliance provided EMB with Groupama pilots ‘firststand-alonePIcoverforSMEs’ the opportunity to explore integration roupama Insurances has expanded trades outside the traditional profes- ing to tap into the demand for PI cover between the full range of EMB software Gits Optima online product range sions, with up to 20 employees, or up from the SME community, filling a gap products and the Teradata Enterprise with the pilot launch of what it claims to 40 via Groupama’s broker trading in the market for a simply administered Data Warehouse. It added that mutual is the ﬁrst stand-alone professional in- team. PI product at a competitive premium. customers in the insurance industry demnity (PI) cover for small to medi- Malcolm Smith, commercial lines “Optima PI not only covers the poli- will be able to accelerate their data um-sized enterprises (SMEs). director, said: “In our increasingly liti- cyholder but can also cover contractors management processes – specifically as The insurer said that the policy, which gious society, the value of PI cover working on their behalf. This is impor- data volume grows with the business. provides cover for over 300 trades and cannot be overstated. It is also becom- tant for smaller businesses that cannot “The partnership with Teradata will professions with indemnity limits from ing a common contractual requirement afford to hire permanent specialist staff strengthen the processing capability £50,000 to £5m, aims to offer brokers and in some instances a condition in other disciplines to their own. And around EMB’s core expertise of data serving the SME community a “viable of membership to professional trade business can be quoted and bound very structuring, management and analytics,” alternative to the major PI insurers”. bodies. Optima PI represents a huge simply via Optima Online, Groupama’s said EMB partner, Peter Lee. It added that Optima PI focused on revenue opportunity for brokers look- SME trading platform.”

18 Insurance Age August 2010 www.broking.co.uk E-commerce

Swift Assure quote-and-buy NEWS IN BRIEF Fortis has invested in a new suite of facility targets high-profile users computer models from technology provider Business Insight that have been ing leads but managed to bring in more designed to predict the relative risk of By Liz McMahon than double that amount. household claims across the UK. The “Our business model has been set up Perils Insight product suite uses com- eicester-based online broker start- to continue this trend as a short-term puting and analytics to identify areas Lup Swift Assure has announced the goal. Years one and two will be the most likely to experience a deteriorat- launch of a new quote-and-buy facility. most difficult as we continue to build ing loss ratio across a range of perils. Alan Gledhill, managing director of on our client base. The insurer said the solution would Swift Assure, which started trading “It’s very early days but we hope to allow it to enhance its existing view of in June, said an increasing number of soon be able to offer more products, high and low-risk areas and provide high-profile occupations were shop- such as building and contents, on a insight into postcodes where Fortis cur- ping for insurance via the internet. quote-and-buy basis,” Mr Gledhill said. rently had little or no claims data. In response, the broker is releasing While Swift Assure wants to con- a quote-and-buy facility this month, tinue expanding online, Mr Gledhill Octagon Insurance has joined the initially for income protection with said he felt the secret was to also Comparethemarket.com panel. Having building and contents to follow. offer clients choice and, along with a launched the venture last year, former “There has been a real mix of profes- Alan Gledhill: Wants to offer choice quote-and-buy facility, still provided Highway managing director, Chris Hill, sions that now want to buy insurance the opportunity to purchase policies via said: “We could not be any happier with online. We have had a chief executive Mr Gledhill admitted that during its the telephone. how the Octagon Private Car product from a regional development agency first month of trading, Swift Assure Along with income protection insur- has been received by our customers. as well as GPs and dentists,” Mr Gle- spent five times more on lead genera- ance, Swift Assure currently offers With everything going to plan we feel dhill said. tion than the income it generated. health, home, dental, travel and life this is the perfect time to move the “From a business perspective, as However, he said that last month the cover on its website, but not on a business on to the next stage, and much as you want something to work, broker spent the same amount generat- quote-and-buy basis. having our products on Comparethe- you never really know until you try market is the next logical step.”Octagon and as a small broker we can be For the latest e-commerce news has also launched a new van insurance agile and responsive to our customer’s product and said it was considering www.broking.co.uk/category/technology needs, whoever they are.” other opportunities.

Aqueduct has rebuilt and refreshed TowergateAffiliateoffersbrokersfinancialincentive the website Lloyds.com. The site con- tains more than 18,000 pages and has owergate is offering a commission been built to accommodate more than Tincentive to brokers that use its 8,000 visitors per working day. It has new afﬁliate website. been designed to provide services as Towergate Affiliate has been designed well as in-depth information, primarily to enable anyone with a website, for an audience of brokers and agents including brokers or online marketing that operate in or that have an inter- specialists, to send traffic to Tower- est in the specialist insurance market. gate’s various businesses in return for Jo Scott, digital communications payment of commission on underwrit- manager at Lloyd’s, said: “Our research ten business. showed that users of the previous site Currently, the programme offers four found it a fragmented experience. We insurance products: business insurance wanted to offer a one-stop shop for via Your Insurance Group; small to all our online services, and to make medium-sized enterprise and niche Lloyds.com easier to use.” business insurance via Assure UK; car hire excess insurance via Insur- Total Objects has been selected by ance4carhire and excess protection via Cogent Resources to implement its Insure4excess, with more specialist global insurance and reinsurance insurance products in the pipeline. Towergate Affiliate offers commission in return for sending traffic to itssite broking solution throughout the com- The offering has been designed to pany’s operations. Cogent conducted provide users with real-time reporting already gone live with a couple of bro- of offers and simply bolt on new offers a review of its processes and said it on all activities across the different kers, was attracting growing interest as they become web enabled. The sys- required a more cost-efficient and brands, with Towergate Affiliates, from the marketplace and that more tem allows us to track, in a single place, technologically advanced solution which is provided and managed on products could potentially be made all the affiliate activity carried out on with an extensive reporting capability Towergate’s behalf by internet mar- available on the system by the end of our behalf. to deal with its widespread operations. keting specialists Speedie Consultants, the year. “It also allows us to strictly control Cogent said it selected Total Objects providing users with a choice of ban- Simon Vella, Towergate eInsurance creative and the way in which we are as it is one of the only providers in the ners, buttons and links. director, said: “The single platform promoted, which is vital to make sure market that has a fully integrated pack- Jason Hulott, a director at Speedie offered by Towergateaffiliates.com our programme works within the com- age with its own existing technology Consultants, said the system had allows us to attract affiliates to a range pliance framework.” gateway to the market repositories. www.broking.co.uk August 2010 Insurance Age 19 DELIVERING SUCCESS UK Broker Awards Shortlist

10 September 2010, The Brewery, London 2010

Insurance Age would like to congratulate all those on the shortlist, and wish you all the very best of luck on the day.

The E-business Award Sponsored by Investment in People Award Sponsored by Schemes Intermediary Sponsored by MORIS Barbon Advantage of the Year MCL Insurance Services Centor Insurance and Caunce O’Hara Matchmaker - Blyth Valley Risk Management Insurance Risk & One Call Insurance Coversure, Kennington Claims Management Cowens Survival Capability Schools Advisory Service The Technology Award The Green Insurance Company BIG Trading Platform Higos Intermediary of the Year Sponsored by MCL Insurance Services Autonet Insurance Pi Online System Private Clients Intermediary Sponsored by Blyth Valley of the Year Caunce O’Hara Claims Service of the Year Sponsored by Coversure, Fleet Morrison Insurance Solutions Centor Insurance and Savills Insurance Services Thomas, Carroll Risk Management SmithGreenﬁeld Services Sponsored by Howden Insurance Brokers Young Broker of the Year Knowlden Titlow Insurance Brokers Personal Lines Intermediary Sponsored by Andrew Blackburn – Marsh of the Year Charlotte Hannah – Kwik Fit Financial Customer Service Sponsored by Autonet Insurance Services Provider of the Year Caravanguard Phil Horner – Lockton Caravan Guard Chase Templeton NDML The Green Insurance Company Business Owner of the Year – RIAS Matthew Pyke - Lloyd & Whyte Marketing Campaign Sponsored by Samantha, Jerry and Nick Beere - Morton of the Year Commercial Lines Sponsored by Michel Blueﬁn Intermediary of the Year Rajan Amin - Coversure, Kennington RIAS Insurance Risk & Claims Thomas, Carroll Management Achievement Award Sponsored by Romero Insurance Brokers To be announced on the day

Sponsored by Wilby Network Member of the Year Building and Land Guarantees (TEn) CLA Risk Solutions (Cobra Network) R G Ford (Broker Network)

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KIC first half 2010 results and outlook

Letter to president Petrov Arverbeyev indemnity (PI) sectors but the market, in gen- operating ratios on normal trading are slim. Kazakhstan Insurance Company eral, remains highly competitive. We badly need a hardening commercial market However, the personal lines arena is showing to radically improve our results. Dear Petrov, a different trend. The aggregators continue to A new Government is in power in the UK It has been a year since I took over control capture a higher market share in the distribu- and there have already been some significant of the UK division and I am pleased to report tion of private motor. This is feeding through changes. Insurance Premium Tax has increased a result that is better than plan for the first six to those brokers and insurers that support from 5% to 6% – this is likely to have a limited months of 2010. them. However, underwriting results from this impact on demand but may create pressure on The action taken to stop the large drop in source are deteriorating, leading to even higher commercial rates. VAT is going up in January revenue has been successful and we grew over rate increases coupled with higher mark-ups 2011 from 17.5% to 20%. This will have an the first six months of this year. Many of our as aggregators become increasingly avaricious. adverse effect on claims costs and we probably competitors have experienced declining income. This validates our decision to avoid this market need a rate increase of some 3% to cover this. As anticipated, pre-tax profits were lower than and means we can now be competitive in our If we fail to achieve this, the extra will affect the same period in 2009 but were better than direct and broker channels. However, it will our trading results. There will be a large reduc- plan. The whole market experienced a fall in take time for the public to change their pur- tion in public spending, which could stunt the investment income as low interest rate reduced chasing habits. We do, however, expect that economy unless the private sector grows to fill returns. The stock market has remained volatile change in distribution is imminent. the gap – diminishing our growth aspirations. and sovereign debt has been well publicised so Our competitors are showing varied results The Financial Services Authority is to be abol- we have taken action to de-risk our portfolio by – most are talking about hardening markets but ished, with some powers passed to the Bank of disposals and hedging. This has affected invest- little action takes place. A mid-range insurer England and others to a new body – The Con- ment returns and means underwriting profits specialising in construction and PI has ceased sumer Protection and Markets Authority – but are even more important. We are delighted that writing business and this may absorb some it remains to be seen how this will affect brokers our operating ratio was still under 100% and capacity and increase rates in these sectors but and distribution. We will be in a better position this benefited from lower reinsurance costs and otherwise there is nothing to suggest any real to comment when presenting our 2011 plan. the absence of any major weather incidents. improvements apart from vehicle insurance. Overall, we are pleased with the progress Distribution of commercial business in the made and, barring a major loss, I expect to UK is in a period of stability. The consolida- Talent scouting deliver a better than plan result at the year end. tors are still finding it difficult to obtain the The market has seen many high-profile moves finance to make major acquisitions and even and competition is increasing for talent recruit- Regards, the prospect of an increase in Capital Gains ment. There is a shortage of good quality sales, Paul. Tax did not stimulate any extra demand. Con- marketing and distribution experts and those solidators are now focused on managing their with the reputation and skills are in demand. Response from President Arverbeyev debt, maintaining EBITDA profits and inte- We are working hard to retain our existing tal- grating their past acquisitions. ent and are always on the lookout to recruit Dear Paul, Most are facing falling income because of additional market leaders. A good start and I am glad this year’s results competition, commission rationalisation, staff We anticipate the second half of the year to will be better than plan. However, we will defections and the recession. They are trying follow a similar trend. Our results should show need to see a dramatic improvement in 2011 to achieve organic growth but are mainly fail- a substantial improvement over 2009, which as capital will still be scarce and higher returns ing, as this requires building up a marketing was adversely affected by year-end floods. required. You should now be taking action to and sales ethos, in contrast to the acquisition We will continue to grow and act ruthlessly deal with this. model. The smaller independent market is now to control costs. The revenue reduction in holding its own and justifies our decision to 2008/9 will gradually work itself through the Yours, concentrate here. The predicted hard market in earned premium line and this should further Petrov. n this sector has not materialised as competitors stabilise our position. However, neither we still seek to balance their portfolios. Vehicle nor our competitors are in a strong position Email Tony Cornell of Cornell Consulting at rates are increasing and there may be a hard- to handle a major weather incident. Claims [email protected] ening in the construction and professional reserves, while adequate, have little fat and

22 Insurance Age August 2010 www.broking.co.uk Opinion Sponsored by: Your letters

Insurance Age welcomesyourletters.Wearehappytonotprintyournameandaddressifrequested but these details must be supplied. Send your letters to Martin Friel, editor, Insurance Age,VNUHouse, 32-34 Broadwick Street, London, W1A 2HG or email [email protected]

Channel choice If the FSA could be persuaded to take action Mark Roberts of CGI is right to warn brokers to against insurers that benefited from these policies and invest in e-commerce (Insurance Age, July 2010). We enjoyed a loss ratio as low as 20%, any fines would now operate in a multi-channel world with customers not unfortunately go to the broker pot. However, expecting to be able to communicate with their insur- the British Insurance Brokers’ Association/Institute ers across a variety of platforms, including mobile. of Insurance Brokers (IIB) might be effective in per- However, such investment in e-commerce can be suading the FSA to reallocate the fines. costly. Additionally, providing customers with choice Even if it never happens, and brokers continue to results in an increasingly complex flow of information pay, it would be fairer than the current outrage back into the business that, if not handled correctly, Editor’s comment negates any investment in channel convenience. Simon Hickman: Everybody must send an email to the For many companies, the answer to this dilemma is FSA asking them to do this – good thinking, Mike. f one good thing has come out of the Finan- to assign the job to a company dedicated to the task. Icial Services Compensation Scheme (FSCS) Outsourced shared-service centres can offer a cost- James Sharp: And perhaps if the insurers in question levy debacle, it is that brokers have shown effective solution while providing the infrastructure were identified, we could ask them about the extent there is only so much they can take. and workflow tools required. to which they benefited from PPI premiums and then It is clear that what brokers are being forced Consumers now demand multi-channel choice and invite them to make a voluntary contribution into the to pay through the latest levy is patently unfair convenience. But these services represent nothing if coffers of the FSCS, so as to ease the burden of the and completely disproportionate. And brokers the back-end processes aren’t in place to drive service brokers that support them in respect of every other have been kicking back at this injustice. improvements from the data. class of business – or face a boycott. It’s heartening to see but unsurprising when Richard Thompson, managing director, Pitney Bowes one considers that many are worried as to how Management Services Mike Cranny: According the FSCS, the fee might they will pay this year’s levy. Barbara Bradshaw double next year. of the Institute of Insurance Brokers has already From the Broker Forum, July Anyone who is able to, needs to start considering predicted this may be the final straw for many. http://forum.broking.co.uk tailored income reporting. But you’re not taking it lying down and for I have written to the FSA today asking them to that I applaud you. As our front page this month PPI – possible solution consider action against insurers for breaching the shows, brokers are asking the Financial Services Mike Cranny: The problem is that the compensation guidance in PS07/11. Authority to take into account that although claims are falling on the broker pot because those insurers may not have directly mis-sold pay- that sold payment protection insurance (PPI) have davidmd: And then we face the cross subsidy for ment protection insurance (PPI) policies, they put their companies into liquidation – some have banking failures once recoveries have been made and designed and manufactured them so must bear started again in new names. The Financial Services figures finalised. The cap for the banking sector is well some responsibility for their failure. Compensation Scheme (FSCS) only pays when the and truly breached, so unless FSCS rules are changed Insurers are hardly likely to jump at the chance responsible party is unable to. – and changed retrospectively – we will face huge bills to pay out even more than they already do but This problem will get worse as more companies go for years to come. We could all pull together and work if they did make some gesture towards sharing into liquidation and more solicitors advertise for busi- on higher fees to enable us to stay in business. the PPI burden, then it may begin to address a ness. Even real brokers will go bust. While competition is healthy it should not be at fundamental malaise that afflicts our industry. The losses of the many will fall heavily on the few. the detriment of insurance brokers generally. This All too often, brokers and insurers are at log- There is a possible solution – pressure the Financial will only lead to removal of competition as smaller gerheads when they should be taking mutual Services Authority (FSA) to take action against the firms fail and others cut back on expansion plans or responsibility to ensure clients are treated fairly. insurers that issued the policies. The banks weren’t recruitment. Whether we are small, medium or large So when those very customers have been sold regulated for Treating Customers Fairly at the time, brokers, we all have a role to play but let’s be sensible a product under false pretences, the industry but the insurers were. about earnings. should unite to remedy the situation. What better way to symbolise this mutual responsibility than for brokers and insurers to share the financial burden of PPI? I’m not holding my breath but if there is an insurance company out there that truly does value the long-term relationships it has with its broker ‘partners’ and wishes to take a very moral stand on this issue, then please, let yourself be known.

Martin Friel, Editor [email protected] www.broking.co.uk August 2010 Insurance Age 23 The interview

Groupama sits somewhere in the middle in terms of how it presents itself to brokers–asbothacompositeanda specialist. Allison Andrews explains to Martin Friel how the insurer’s realistic approach maintains a balanced service

t may not feel like it but, in terms of insur- Iers to trade with, brokers are pretty much spoilt for choice. Unless you are talking about some dodgy little brokerage that exists only to squeeze money out of insurers and clients, insurers are desperate to establish and build relationships with quality brokers of all sizes. They are falling over themselves to offer incentives through various roadshows and promotional events in a bid to get to the front of a broker’s insurer panel. There are the composites that obsess about scale but often miss the detail; there are the newer brands that have come out of Lloyd’s into the regional market with the appetite but perhaps lacking that regional nous; there are the specialists that have a narrow perspective but one that can be very profitable; and then there are the managing general agents that exist to give certain insurers the regional or specialist presence they lack. And somewhere in among that lot is Best of both Groupama – a composite and a specialist; a huge operator in its home country of France but a player of much smaller scale here in the looking after affinity partnerships and personal This is a major element to Ms Andrew’s strat- UK. It doesn’t fit into any particular niche lines. Now that she finds herself positioning egy – getting more out of her existing broker apart from its appetite for schemes so it must Groupama’s commercial lines distribution base. Out of “thousands of live agencies” Ms be rather tricky explaining to brokers what its strategy, how different has she found the Andrews admits that only 120-130 intermedi- risk appetite is when it is an insurer that does needs of various types of brokers? aries constantly trade with Groupama. This is not lend itself easily to being placed in a box. “In commercial, brokers still want face-to- something she appears to be keen to change but This is the unenviable job of Allison face account management – to see people in she is aware she has to be careful. Andrews, Groupama’s head of commer- the office. The restructure enabled us to have a cial distribution, but the difficulties of the team of account managers, which is the team I Quick to act job don’t show. This amiable and laidback head up and they are dedicated purely to com- She understands that in any broker’s top five woman has been at Groupama for nine years mercial business. wish list, you will find a fast turnaround of but stepped into her current role just over “But I have noticed a difference. Because quotes. She is proud of Groupama’s response a year ago following a restructure. She has personal lines tends to be aggregated, it is time, which she says is never more than 24 held a variety of roles in her career both at transactionally faster and more price sensitive. hours and she does not wish to sacrifice it at Groupama and previous company Guardian In commercial, I have found that there is still a the expense of a growing agency. Royal Exchange from marketing and claims to lot more face-to-face dialogue to be had with “Brokers want answers,” she says simply. brokers. They want to talk to you about their “We could run around the UK generating BIOGRAPHY – ALLISON ANDREWS business,” she says. hundreds of presentations but there’s no point Allison Andrews heads Groupama Insurances’ dedicated No surprise there then but what does she see doing that if the underwriters can’t turn it frontline commercial sales force and was appointed head of as the fundamentals of distribution? around at the other end. We have an under- commercial distribution in June 2009. “For me, it is relationship management. Our standing of the number of supporting brokers seven key account managers work very closely that we can cope with without making false She joined the partnerships team in 2001 from Guardian with dedicated underwriters on commercial promises to them and failing to deliver.” Royal Exchange where, over 13 years, she operated in several and fleet in a particular region to understand This is a problem that is by no means areas of the business including underwriting, claims, market- the area and develop relationships,” she says. unique to Groupama. Some players will go ing, operations and account management. “Effective distribution is where we can start on a mad dash for growth willing to deal to see an increase in the number of brokers with the servicing headache when it arrives. Prior to taking up her current position, Allison headed up in a particular region that are habitually using Although the servicing shortfall may sort itself Groupama’s business activities with major brokers, affinity us as a market. That is where we are headed out, those that pursue this strategy often find groups, corporate partners and consumer brands. at the moment and we are starting to see themselves processing quotes that they don’t increases in the number of brokers that regu- actually have an appetite for. This is time con- She is an associate of the Chartered Insurance Institute. larly put business through us.” suming and costly but an insurer doesn’t want

24 Insurance Age August 2010 www.broking.co.uk The interview

“We will have all of our key account manag- She points out that one reason commercial ers in the regions looking after their regional insurance will never become as commoditised offices, I will mark the insurer placement man- as personal lines is that brokers can bring risk ager, Laurent [Matras, Groupama managing management into play, offering more than just director] will mark the consolidator’s MD and a product. This should perhaps serve as a warn- this relationship will continue all the way up ing to brokers that think it’s all about getting to chief executive level. These tend to be the a quote. most successful relationships,” she says. “We talk to brokers about e-commerce Working closely with consolidators is some- regularly,” she says, admitting that there is thing of a departure for Groupama, which still one or two that are resisting the change has traditionally, if not avoided, then kept a even though there is awareness that change is healthy distance from them. That has been indeed inevitable. the perception externally at least but Ms However, Groupama is embracing e-com- Andrews won’t concede that there has been merce and where it cannot transact completely any U-turn in approach. online, it offers a hybrid of traditional and “We trade pretty healthily with consolidators. modern trading methods. We treat our relationships with consolidators’ “All the online business we conduct is backed local offices in the same way we would with up by a broker trading team, essentially a group all our other brokers,” she says adding that of underwriters who can talk to a broker when a although there are executive level relationships, risk doesn’t fit the normal parameters. Groupama tends to deal with consolidators “If a risk gets referred or gets stuck in the mainly on a local level. process for whatever reason, we want brokers “We’ve not changed our stance,” she insists. to speak to our trading team, not as a help- “We’ve always traded locally in that way – all desk, but as a team of underwriters so that that’s changed is that relationships at all levels they can pick up the risk and complete it. This have been strengthened.” way, we don’t get stuck in a situation where That would suggest that no great strides risks are either black or white,” she says. have been made in expanding the broking panel through this channel so we come back to growing the business without compromis- I love going out and ing the quality of service. Surely Ms Andrew’s remit is to grow the business, not just manage generating new business but worlds existing business? there is no point if the back “I love going out and generating new business but there is no point in that if the back office can’t turn it around to refuse trade to a broker if it can help it. So office can’t turn the business around – it has to how does Ms Andrews attract new brokers work cohesively. That said, the account manag- There’s always been the impression that without attracting risks that Groupama has no ers need to spend a lot of time in their regions Groupama is willing to take its chances where appetite for? making those calls because we can’t afford to it finds them and it appears that there is little She explains that the company has a pretty have static panels. We are always looking for pressure from France for the UK arm to grow clear idea of what business it can and can’t new distribution and new brokers because peo- for growth’s sake. But this can have both pros write: “The danger that all insurers face is ple do drop off the radar and others come in and cons for senior management. making bold statements about being able to to replace them,” she says. On one level, there is time to get your strat- write a certain type of business as there will “We would like to work with more and egy right, implement it and have the luxury of always be an exception.” more brokers but we would have to do that seeing these plans bear fruit. Too often, indi- Again it comes back to not raising hopes and by building the back office at the same time viduals are moved on before their actions can making false promises. so that we can still make sure we can deliver be judged properly. “Switching on a new broker takes a lot of the turnaround.” On another level, there is a danger that exec- work and attention because just saying what utives who thrive on intense pressure could trades you want isn’t enough. There are so Slow and steady find the culture at Groupama a little sedate. many factors to the underwriting process that So that’s clearly a rather gradual growth pro- Ms Andrews seems to fit somewhere only by building up a relationship with the gramme but one area where Groupama may between the two. Like Groupama, which underwriters, will the brokers truly understand manage to generate faster growth is in e-com- doesn’t really fit any existing mould, she what it is you want to underwrite,” she says. merce and although it has been an enthusiastic seems to enjoy the fact that she can imple- If ever there was an industry that was adopter of the medium, Ms Andrews is at pains ment a proper strategy and has the time to built on personal relationships, it is insur- to stress that any e-commerce strategy from watch it deliver but there is also a hunger ance but it could be argued that this makes Groupama will always involve brokers. there to grow the business and get brokers it fundamentally unstable. If an individual “It will never replace traditional broker trad- “switched on” to Groupama. leaves a particular organisation, then a very ing. This way of trading commercial insurance The two seem perfectly suited. There are lucrative business relationship can simply dis- will reach a natural ceiling in terms of premium risks for both parties in pursuing the slowly but solve. Ms Andrews explains that Groupama levels because the complexity of the risks mean surely approach but for now, it appears to be a has attempted to mitigate this by establishing that even with fabulous technology, you cannot strategy that both Groupama and Ms Andrews multi-level relationships with its broker part- replace the advice that a broker can give. are happy with. n ners. Using ABC consolidator as a theoretical “As an industry, we have a responsibil- example, Ms Andrews says that there will be a ity to make sure the integrity of commercial For the interview archive local relationship between the consolidator’s insurance is not compromised by the over www.broking.co.uk/tag/insurance-age-interview local office and Groupama’s account manager. commoditisation of products,” she says.

www.broking.co.uk August 2010 Insurance Age 25 Power hour

A cooperative coalition? This month’s power hour assesses the impact the Con-Dem Government has the board? alreadyhadoninsuranceanddebateshowitwillcontinuetoinfluencethe Steve: What is important is to focus on getting industry in the future. Liz McMahon reports the EU regulation to work properly rather than deliberating over whether we are going to have it – that is a certainty. We can’t just dip our toes Top, from What do you think about the coalition’s banking industry and insurance always gets in; we have to be in the middle to ensure it’s left: Howard decisions so far? caught up unfairly in that. When Mr Cable working properly for everyone’s benefit. Jones, came in as Business Secretary he said he was Michael McManus, Steve: The coalition Government has inherited going to sort out regulation of financial serv- Philip: Traditionally we have been – we Barbara a very difficult set of economic factors to deal ices and the Treasury, which is led by the introduced the Individual Capital Adequacy Bradshaw with and still has some tricky and potentially Tories, said, ‘oh no you’re not’. This has been Standards regime, which sort of prefaced Sol- unpopular decisions to make. Remember it is one of the only public tussles there has been vency II. At the time there was concern that not a Government with a large majority that so far in the coalition. there would be regulatory arbitrage between can comfortably plan five years ahead – it needs some states with a gold-plated standard only to be continually mindful of the opinion polls. Barbara: We are quite fortunate in having being applied in the UK so it is right to have a Direct taxation was always going to be unlikely Mark Hoban at the Treasury as at least he regulator to ensure things are equalised. so indirect taxation is the obvious target and I understands what insurance is about, having think what we’re seeing so far bears that out. audited brokers in an earlier life. He is ahead Howard: The UK is very good at implement- of the game to start with. ing regulations and gold plating. I’d like to see Philip: The Lib Dems have changed their some of the other states following suit. stance and fallen into line with Tory policies Steve: We can take some comfort that he does but they also seem to have moderated them recognise the difference between banks and Steve: The cost of being regulated in the UK, in some ways. They have let spending cuts insurers but what we now need to see is that certainly from an intermediary perspective, far through but they seem to have got a fair deal recognition manifesting itself in the treatment. outweighs anything like it throughout the rest in return – the ballot on alternative voting of Europe. methods for example. What do think about the coalition’s Gov- ernment’s commitment to a pan European Barbara: This can make brokers non-competi- John: As it stands, the Government has got no supervisor? tive if they want to trade in Europe. teeth and as long as it is in a popularity contest it will find it very difficult to make any real Michael: I’m not sure the Government’s Michael: The politics in Europe are quite changes. A year ago, the Conservatives were position is terribly important as it is going to interesting as we aren’t quite at end game yet. promising to disband the Financial Services happen anyway. The EU Parliament is pressing for much more Authority (FSA) and look at what’s happened robust statutory regulation because they are there. With £60bn of debt and potentially Howard: With Solvency II there has to be under political pressure. The politicians are more at the end of this year, they could have overall regulation to ensure that each state is driving it for once. been even a little bit more ambitious in the applying the new rules correctly and therein emergency Budget, especially with indirect tax. lies the concern. Howard: It is unusual for the commission to be overrun by politicians when the differ- Michael: Vince Cable [Business Secretary] John: Wasn’t the problem in the banking cri- ence in the nature of the countries is taken said some extremely harsh things about the sis born out of not having rules applied across into account. We are a very open market but

26 Insurance Age August 2010 www.broking.co.uk Power hour

in other countries there is still significant state rank and file of the party is definitely more ATTENDEES influence in lots of companies. left wing than its parliamentary counterparts at the moment. Howard Jones John: After the honeymoon period is over, I’m Head of financial services tax, Mazars not quite sure where the current coalition Gov- Barbara: It will be their first time together ernment stands on Europe as a centre anyway. having that opportunity to say to each other Philip Alexander exactly what they think. Partner at Littlejohn Steve: The Conservative White Paper spoke rather glibly about putting a man in Europe, Howard: And this is the first time that they Barbara Bradshaw which is an awful comment when they have have been in the position where they can Chief executive, Institute of Insurance Brokers a team of civil servants already there. Mark influence what is actually happening. Hoban has picked up Europe as part of his John Harrison remit so we have some comfort in that. Michael: The danger is, of course, that the Sales and marketing director, CCV perception among Lib Dem activists is that Michael: Mark is not particularly party politi- their MPs are just supporting a Tory Govern- Michael McManus cal and that is what is good about him. The ment – after all there’s a Tory Budget, Tory Special adviser to Lord Hunt at Beachcroft civil servants respect him; the Treasury will policy on the health service and regulatory deal with him in a positive manner because he changes are essentially Tory proposals. Steve White has the right sort of approach. Head of compliance, British Insurance Brokers’ Association John: But they’ve sacrificed that for the vote, Steve: What I have seen so far is that the haven’t they? They’ve sacrificed everything in which consumers can easily fall. This really is an coalition appears to be very Euro friendly but the belief that they are going to get more say issue and technology moves at such a pace that they have dropped any mention of going into next time around. Everyone seems to be very it is a challenge for regulators to keep up. the Euro. positive about the five-year term but I just feel it is going to implode when the money hits Michael: On a broader point, the internet Do you think there are any other issues that and people start feeling the bite. makes it far easier to trade with someone who could cause disharmony in is not in your territory, whatever you are doing the coalition? – if you are buying books or financial services The FSA might have been looking products – and that is a test for the regulators. John: The voting system. at the jigsaw, but it wasn’t able to What are your thoughts on the plan to Michael: It is interesting to restructure regulation in the UK? see what the Labour Party put the pieces together and work does about the alternative vote out whether they were sky or sea Steve: One of the criticisms of the FSA is that because there is a call in the while it might have been looking at the jig- rank and file in the Lib Dems Steve White saw, it wasn’t able to put the pieces together and the Labour Party for the and work out whether they were sky or sea. two groups to come together. A lot of Lib Philip: In the five-year view, the next one to Part of the discussion we had with Mark Dems wish the arithmetic had been different three years are going to be very challenging. Hoban on the run up to the election was that and in their heart of hearts they would rather By years four and five, the election will be just we didn’t want the regulation of insurance support Labour. around the corner and the Government will be intermediaries to be split between two differ- hoping that the bad news is out of the way. It ent regulators. The British Insurance Brokers’ Philip: The conference in September should is in both parties’ interests to stick to that five- Association made the point that insurance be very interesting for the Lib Dems. The year plan. intermediaries were not a systemic risk to UK plc and didn’t need to be regulated by the Steve: It is a coalition that suits all three par- Bank of England so we are quite happy with ties. Labour may not mind taking a step back the plans to form the Consumer Protection from this so that they can sort themselves out Market Authority (CPMA). and get a new leader in place while the other two parties take the flack for any pain caused Philip: Do you think the prudential standards by the cuts. will be set by the bank or the Prudential Regu- lation Authority (PRA)? Michael: In three years’ time, the last thing any Lib Dem will want to do is go to the Steve: I imagine that the PRA will have some country and that will be very powerful in hold- input in the rules and the supervision of them ing the coalition together. They are already but it probably won’t be responsible. down to 15% in the polls. Philip: Will there be any areas where there is From Twitter: What steps should the Gov- an overlap? ernment take to make it easier to regulate digital business? Michael: We are going into a two-year period, and if you look at Mark’s statement, at the end Steve: One point we put to the FSA about of that time he wants the new system up and aggregator sites was that the rules were written running. To me that means there will be one at a time when electronic introductions weren’t year of consultation and, therefore, it is impor-

Steve White even a concept. When technology moves on but tant that the voice of the insurance market is 28▲ regulation is set in stone it can create a gap into heard during that period. www.broking.co.uk August 2010 Insurance Age 27 Power hour

Right: Philip Barbara: That’s right and Mark is a listener. but it is not proving to be at all easy. People Alexander who mis-sold PPI, primarily credit brokers, John: So do you have the confidence in deal- have permission to sell a general insurance ing with him? Does he think we are over contract just like insurance brokers do. If we regulated or do you feel like he is going to can find a way to separate ourselves it also has take a completely different view of regulation to be sustainable in the long term. at the end of his period? What other concerns are there for the Steve: He understands the industry but I am insurance industry? not convinced he thinks we are over regulated. It is obviously a matter that we are going to Steve: The cost of regulation in the UK now have to keep banging the drum about. is quite scary. Take the very biggest firms in the 27 EU countries and work out what Michael: He is a shrewd enough politician to they would pay as an annual fee – add them avoid phrases like under or over regulation. together and the UK fee is probably greater What he will say is that proportionate regula- than all the others combined. tion is needed and that’s fair enough – it’s not just rhetoric, it is a genuine point. Barbara: The cost of the annual fee is just the beginning. In a big firm, how many people From Twitter: Is there a danger that Insur- are you actually going to have to employ to ance Premium Tax (IPT) could be increased make sure you are compliant? further? Steve: It’s a revenue-raising device. It’s not If you had one piece of advice to give the Howard: That is a significant worry. The rates that anyone thinks that insurance needs to be coalition Government what would that be? that are being charged in Europe are consider- hit with anything. ably higher. Howard: To promote the UK as a destination What about the Government’s pledge to for financial services. I’d like to see the rate of Steve: The UK rate of IPT is very much at award 25% of its contracts to small to personal tax decrease so that it is competitive the low end of the European scale. Germany medium-sized enterprises (SMEs)? with other countries. The Government should is 19% – we’ve just gone from 5% to 6%. Any be promoting the country as a place for busi- changes to direct taxation aren’t going to John: Once you start putting quotas on any- nesses to come and set up a head office. In be popular but changes to indirect taxation, thing there can be problems. financial services, most of the tax is collected which is what people view IPT as, are fairly through payrolls so we want profitable compa- easy to do. So we could be in for several years Michael: You skew the free market. nies to set up shop in the UK and employ lots of small increases. The key thing is can we of people. sort out the transitional arrangement around Steve: While I applaud the intention, the the changes to IPT. It’s not as simple as say- practicalities of it may take some working out. Steve: Insurance is the lifeblood of UK plc and ing you have six months notice of an IPT intermediaries play a fundamental role in provi- change – what about the long-term products Michael: It’s a good aspiration and sends a sion of advice. Regulation must therefore be that have already been written? positive signal to SMEs but it is dangerous if appropriate, proportionate and cost effective. It it is too prescriptive. is not that at the moment. John: I completely endorse that. They’ve missed a trick and lots of small increases are John: If you are looking for incentives for Barbara: Regulation must also be more broker just going to add to that admin problem. Peo- small business then there is an awful lot the centric and it is so vital that everyone keeps ple are going to end up having to do it five Government could be doing to encourage talking. times instead of once. They had an opportu- banks to lend to SMEs. They know, however, nity to do it just once and I don’t think people any hard and fast rules on lending would be Philip: Staying with broker regulation – the would have really felt that unpopular even if they would have more of a key thing is to make sure that when the FSA bad about it. significant impact. restructure takes place, the CPMA takes a look at the rule book and simplifies it. Steve: Well Moving back to regulation, what they certainly kind of decisions would you like to Michael: The only thing I can say is keep calm wouldn’t have see the new regulator making? For and carry on. been surprised instance do you think brokers’ con- if it had. tribution to the Financial Services John: My advice would be to allow self- Compensation Scheme should be regulation. If they stick to the financial rules Howard: If based on the products they sell? already within the industry and stop interfer- you know there ing in the day-to-day application of products is an economic Barbara: Yes there should be a out on the street then I would think we could problem you product levy. save a lot of money. However, that won’t accept that there happen so I’ll go with Michael and ask them are going to be addi- Steve: We are actively involved in to stay calm and not meddle too much with tional costs to bear. the FSA’s review and are trying to what is already there. ■ find a way that separates us from the For the latest regulation news causes of the www.broking.co.uk/category/regulation John Harrison problem

28 Insurance Age August 2010 www.broking.co.uk Viewpoint It’s PPI payback time Aftermonthsofspeculation,theletterhasarrived.Andrew Welch commission, like the banks and loan institutions, for greater contributions. And what about the explores just how hard brokers have been hit by this year’s soaring FSCS insurers that actually issued the policies and expe- levyastheFSAclawsbackcashtocoverclaimsfrommis-soldPPIpolicies rienced some very modest claims ratios? However this is really a case of shutting the stable door after the horse has bolted and looking to divide up the eneral insurance brokers will have been shocked an income of £500,000 of eligible business, the FSCS pain in the most equitable way after the event. Gto have received this year’s notification of the part of the levy is a massive £3,251.18, up from just A key question may be to ask what the industry levy payable to the Financial Services Authority £419 last year. and Government is going to do to stop financial (FSA). In many cases it has shot up, for example a While most people probably would not object to scandals happening in the future. After all PPI broker with a regulated income of £500,000 will the idea that someone who has been mis-sold PPI mis-selling is only one of a line of such scandals have seen the charge more than double. – for example a self-employed person being duped including endowments, pensions and mortgages. It The main reason for this is a substantial increase in into buying a highly priced policy that would seems that where there is a quick buck to be made, the amount required by the Financial Services Com- never cover them in the event of a claim – should someone will always be there to make it and the pensation Scheme (FSCS) to cover mis-sold payment receive compensation, the issue is which part of the regulator hasn’t always done such a great job of pre- protection insurance (PPI) claims against companies industry bears the cost. As things currently stand, venting wide scale questionable behaviour. that have gone bust and are in default. brokers are in the same contribution group No one can have failed to notice all the public- as other general insurance intermediar- ity and advertising that now surrounds claims for ies including those companies selling PPI, The many are having to chip in allegedly mis-sold PPI. It’s difficult to pick up a which means that brokers – many of which newspaper, listen to a radio station or watch televi- never made a penny out of selling PPI for the errant few, but the many sion without hearing from a claims farmer promising – are bearing the cost of compensating for did not get a chance to collect a to get you recompense if you have been wrongly practices that they did not participate in or sold a PPI policy in the past few years. profit from. That just doesn’t seem right premium for the risk This activity has led to a massive increase in that on grounds of natural justice. Let’s put it type of claim to the FSCS. Approximately 46 PPI in insurance language. As we all know, insurance Even if more effective regulatory supervision firms have been declared in default this year and operates on the principle of the many paying for can be introduced in the future there will always the FSCS is expecting 6,000 new claims for PPI the few, but in this instance the many are having to be rogue operators and defaults so compensation mis-selling compared with a provision it had, only chip in for the errant few, but the many did not get schemes will always need to be there. A fairer way of a couple of years ago in 2008/09, for an expected a chance to collect a premium for the risk. funding them to avoid the current injustice to gen- 800 claims. The result has been that of the £148m eral insurance brokers may be a product levy taken the FSCS needs to raise from the financial services Low blow at point of sale. industry, a whop- Unfortunately, this is coming at a time of difficulty So for example, for every PPI policy sold, if a few ping £61m will for many brokers – especially the small independ- pounds had been added to the price and then that be needed to ents – that can ill afford fee rises of this scale as put into a fund, the compensation problems we cover PPI they struggle to survive the recession and provide a now face could have been less. It is easy to see that claims, with service to their insureds in an increasingly competi- the Government may object to such an approach no sign tive market. because it could be seen as a tax on the consumer that the Barbara Bradshaw, chief executive of the Institute but in any scheme where businesses are required to volume of of Insurance Brokers (IIB), has said that this levy contribute, that cost is usually passed on to the cus- claims could be the straw that breaks the camel’s back for tomer in one way or another anyway, isn’t it? is likely some. The IIB and the British Insurance Brokers’ If a market is properly functioning then busi- to slow Association are doing their best to lobby the FSA nesses will price their products to compete, even if down any to change its fee structure to be fairer to general part of the price includes a compulsory compen- time soon. insurance brokers but any change will be too late sation levy element. After all, we are paying for Of the total for 2010 and the prospects may not look good uninsured drivers through our own motor insurer’s FSA charge for future years. The problem is that the deluge of contribution to the Motor Insurers’ Bureau fund, of £5,320 to PPI claims is likely to keep coming and somebody but motor insurance remains competitively priced. our theoreti- has got to pay for them. A lot of the intermediar- Again we are back to the many paying for the few, cal broker ies that did have a business selling PPI have seen but at least with a product levy, the paying many with that book take a nosedive in recent years and they bear some relationship to the few, whereas under may well not have the assets to meet claims the current system the poor old general insurance going forward. In those circumstances broker that has no relationship with the PPI seller or putting themselves into default policyholder keeps paying. ■ could seem like the only option, and then the FSCS is left to Andrew Welch is partner and head of insurance at pick up the tab. Stephensons Solicitors One way forward might be to look to the other parts of For the viewpoint archive the financial services indus- www.broking.co.uk/tag/viewpoint try that benefited from PPI www.broking.co.uk August 2010 Insurance Age 29 Race ahead with Care and Charity online

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Thismonth’sreportage,sponsoredby Ecclesiastical, deals with all things web- based.Weofferadviceonhowbrokers canmakethemostofsocialnetworking;tracktheriseof mobiletrading;pointoutthedosanddon’tsofonline security; examine the efficiency of transactional websites; Technology focus and ask whether specialist risks can be traded online. Aprofile Louise Meeson offers advice onhowbrokerscanmakesocial networking pay 32 that pays

Online security 38

37 Mobile phones Specialist products 41 39 Transactional websites www.broking.co.uk August 2010 Insurance Age 31 Reportage: social networking

Aprofilethatpays

Everyone’s talking about social networking but have businesses overlooked YOUTUBE STATS thecommercialpotentialofthesesites?Louise Meeson offers advice as to ounded in February 2005, YouTube is an how brokers should use their online profiles for marketing and trading Fonline video community that allows people to watch, upload and share video clips. ● People are watching 2 billion videos a he explosion in social networking sites over be made to work commercially? With myriad day on YouTube Tthe past decade has transformed the way sites available, which ones should brokers ● Every minute, 24 hours of video is we communicate. Indeed, for many, sites such target, how should they engage with each uploaded to YouTube as Facebook and Twitter have become the pri- specific audience and what potential pitfalls ● The average user is aged 18-55, evenly mary method of keeping in touch, making even should intermediaries be aware of? divided between males and females emails redundant, and these sites, together with ● Some 51% of users go to YouTube weekly the plethora of blogs that are at our fingertips, Voyage into the unknown or more and 52% of 18-34 year olds share have for some become the main way of finding Few would deny that the leap into social videos often with friends and colleagues out what’s going on in the world. media can be daunting, after all where do you ● YouTube is currently available in 19 coun- According to recent research from the UK start? What is clear is that taking a scattergun tries across the globe and in 12 languages Online Management Company (UOMC), one approach, setting up various social networking in every four and a half minutes online is now accounts and firing off random messages into discover the type of issues they are talking spent on sites such as Facebook, LinkedIn and cyberspace, is not the key to success. First of all about and offer advice on insurance when blogs. This is a sharp increase from April 2007 brokers need to go back to basics. they crop up,” he adds. when UOMC found social networks and blogs Chris Pitt, head of corporate communications However, before plunging headfirst into accounted for less than 9% of all UK internet at Ecclesiastical, says it is crucial to listen to the social networking arena you need to think time, equating to one in every 11 minutes. the kinds of issues people are talking about on about what you want to say as any foray will But while the social networking boom con- social networking sites before getting started. leave a lasting digital footprint. tinues and we embrace the phenomena in our He points out that there are many forums in Mark Huxley, director at Lamb Creative personal lives, there has been some resistance existence, where groups that brokers and insur- Marketing and Consultancy, explains: “You to utilising these sites in a professional capacity ers should be listening to – such as homeowners need to understand the personality you want with it remaining a black art for many brokers. – are discussing relevant topics. to portray in the first place and the vocabulary And so the question arises – can these sites “By tracking down these groups you can you use so your business has the right atti-

32 Insurance Age August 2010 www.broking.co.uk Reportage: social networking

STATISTICS FROM TECHNORATI’S STATE OF THE BLOGOSPHERE 2009

web log, more commonly known as a blog, is a website or part of a site that is updated with regular entries of Acommentary or information or other material such as graphics or video. Many blogs provide comment or news on a particular subject while others function as more personal online diaries. l There are currently more than 133 million blogs listed on blog directory Technorati l Some 72% of bloggers are classified as hobbyists, meaning that they make no income from the pursuit. Of those who have monetised their blogging: 54% are part-timers; 32% are self-employed and 14% are corpo- rates, who blog full-time l Some 71% of those that maintain blogs for a business report that they have increased visibility within their industries and 56% say that their blog has helped their company establish a position as a thought leader l When it comes to brands, 70% of bloggers talk about them, 46% post about the ones they love or hate, while 38% post brand or product reviews l Two-thirds of bloggers are male, 60% are aged 18-44 and the majority are more affluent and educated than the general population

up a following and once you have that you success with this on Twitter and Facebook. So must remain active to retain your audience. despite the ignorance and scepticism that exists “The bottom line is that in order to make it there is definitely value in networking online, work you have to create useful content and be so long as users are aware of the inherent dan- willing to engage in a two-way conversation,” gers of giving your plans away to the world he comments. “You need to find the ‘influ- and your contacts away to competitors.” ences’ within your networks, engage with them LinkedIn is used to make and maintain busi- and they in turn will then share your content ness contacts as well as debate relevant topics. with their contacts if it’s useful.” Graeme Newman, business development direc- It is also wise to carefully choose the types tor at CFC Underwriting, explains that he of social networking sites you interact with. uses LinkedIn to research people he is going Certain forums such as Facebook are more to meet to find out where they have worked commonly used for personal interaction, how- previously as well as who their contacts are to ever for more light-hearted consumer-facing establish common points of interest. tude. Make sure that’s understood internally campaigns such as the Compare the Meerkat before pushing that out to social media – you adverts it can work well. The Facebook page have to do all of that prep work beforehand.” for Aleksandr Orlov, the fictional founder of Find the ‘influences’ within your The messages you post on social network- Compare the Meerkat, has almost 750,000 ing sites must add value and spark interest, members, however most businesses choose to networks, engage with them and rather than merely advertise your company, focus on LinkedIn, Twitter and blogging. otherwise the audience will switch off. they will share your content with James Simpson, director at FWD Digital, A rounded approach their contacts if it’s useful recommends that brokers start off by setting up Lyndon Wood, chairman of Moorhouse a blog and a Twitter account. He says: “Write Group, says: “To be effective, networking John Clements a 200-300 word blog on something of inter- online needs to blend with an overall market- est, for instance ‘do you realise if you have a ing approach tailored to fit with a business’s Similarly, Mr Huxley points out that Linke- liability policy it needs to include this particular strategy. Different sites should be segmented dIn allows you to manage and utilise your small print?’ or picking up on a news story and by audience. For example, Facebook, Bebo networks, maintain relationships and, through applying an insurance angle to that, such as the and MySpace are for social use but others such joining relevant groups and offering advice, volcanic ash cloud. However, you have to strike as LinkedIn, Xing and Ecademy are business position yourself as a thought leader. a balance between selecting something interest- networks. Aligning typical audience profiles of Mr Clements highlights LinkedIn’s ‘questions ing and something different so your blog stands individual sites with an individual business will and answers’ facility as a particular benefit. “It out. You can then publicise the blog via Twitter dictate which sites are chosen. can make you appear an expert,” he comments. by building up your following.” “Regularly posting informative, even news- “You can go on and pose a thoughtful ques- Similarly, John Clements, partner at Stani- worthy material is required to get the best tion, which invites people to comment and then forth, says “there isn’t a holy grail or treasure results, whichever sites are selected. Moor- enter into a debate. This then becomes searcha- chest”, and that it takes time and effort to build house subsidiary Constructaquote has seen ble. If you answer a question and are deemed to have posted the best answer then this is flagged TWITTER STATS TM on your profile page – it’s a recommendation.” An increasing number of businesses appear witter, which was created in 2006, enables users to send and read messages called tweets, to be waking up to the benefits of social net- Twhich are text-based posts of up to 140 characters. Users can subscribe to another author’s working. For example, CFC Underwriting is tweets, known as following. about to embark on a major social networking l Twitter has more than 100 million registered users campaign. Mr Newman says the company is l About 300,000 users sign up per day with about 60% of these coming from outside the US currently focusing on creating online video, l Twitter receives 180 million unique visitors per month which will appear on a new website, and busi- l Some 75% of Twitter traffic comes from third-party applications and 60% of all tweets come ness-useful technical information, distributed from third-party apps via a multitude of channels such as YouTube, l There are 600 million search queries on Twitter per day Twitter and blogs, that brokers can utilise and l There are over 100,000 Twitter applications also forward to clients. “In the old days, if 34▲ l Some 37% of active Twitter users use their phone to tweet you wanted to film a TV advert you needed www.broking.co.uk August 2010 Insurance Age 33 Reportage: social networking

LINKEDIN STATS inkedIn, launched in 2003, is a business-orientated social networking site used mainly for Lprofessional interaction. After joining, users create a profile that allows them to summarise their professional expertise and accomplishments. They can then form connections by inviting contacts to join LinkedIn and connect to them or searching for existing member contacts. l There more than 70 million LinkedIn members across the globe with 15 million of these based in Europe and four million in the UK to invest millions of pounds l Currently, LinkedIn has members in 200 countries on all seven continents now we can get a video on l LinkedIn is available in English, French, German, Italian, Portuguese and Spanish 20 or 30 platforms for a mar- l Some 25% of FTSE 100 companies and 50% of Fortune 100 companies hire through LinkedIn ginal cost,” Mr Newman adds. l One professional joins LinkedIn every second and one million professionals join every 12 days He says the company plans to create blogs l One billion people searches were conducted on LinkedIn last year for all of its product areas, which will be l There are about 500,000 LinkedIn groups updated frequently, be interactive and therefore take the traditional electronic newsletter you need to monitor any discussions mentioning format to the next level. your business so you can respond quickly. Also, Ecclesiastical has opted to build its own social don’t be afraid. There’s a risk you will attract a media platform, Talking Point. Mr Pitt says: detractor but don’t pull up the shutters – it’s an “Crucially, it doesn’t have our brand all over open forum, if you don’t engage it’s obvious it. If we used it merely to promote our brand and looks as if you have something to hide. If it would fall down straight away as if there is you engage it shows you are willing to listen.” any hint of corporate undertone in the social grated approach. Twitter, LinkedIn and blog Mr Pitt agrees that the world of social media networking world, it’s dead in the water. It’s a accounts can be linked and cross-referenced to “can be incredibly dangerous”, which is why place for people to talk – specialist groups such create a circle of content, a consistent personal- insurers and brokers are nervous, but states as care home owners, people looking for advice. ity for your business and drive interested parties that if you want to get involved you must You need to try and direct people towards you back to their own website. It is also crucial to throw yourself into it completely. to have these conversations. You need to host make an impact on other forums and sites in “The risk of not knowing what people are the discussion, that’s the next step.” order to establish yourself as an authority in saying about you is far less than the reputa- Brokers need to ensure they take an inte- your professional field. Creating fresh content tional damage that can be inflicted on your also has search engine optimisation benefits. business if you are unaware or ignore com- For the latest social networking news Mr Huxley says: “If you are a regional ments. Entering into a dialogue is better than broker, use your local blogging sites from ignoring it,” he adds. www.broking.co.uk/tag/social-networking organisations such as your local chamber of commerce. FACEBOOK STATS It allows you to establish a Social networking is not the be voice outside of ‘I am an ounded in February 2004, Facebook is a social utility de- insurance broker from down- all and end all – it’s just another Fsigned to help people communicate more efficiently with town suburbia’. You become part of the jigsaw of building their friends, family and colleagues. Users can add people as a broader voice and a voice friends, send them messages, share information and photos to the wider community. You your brand and image and update their personal profiles to notify contacts about can use it to extend your themselves. Additionally, users can join networks organised by brand, sponsor local events, Graeme Newman workplace, school, or college. and use your sponsorship l Facebook has more than 500 million active users within a social network context to broadcast “A lot of companies’ reaction to social media worldwide your interest rather than just patting yourself is to set up a Facebook page and a Twitter l Some 50% of active users on the social networking site on the back for sponsoring the group. That account but the key is that you need to have log on in any given day will serve to lift your place in the community. something interesting to say otherwise it won’t l An average user has 130 friends “Social networking is not the be all and engage. Having a Facebook page with no l In total, people spend over 500 billion minutes per month end all – it’s just another part of the jigsaw of friends or a Twitter account without followers on the site building your brand and image.” is worse than not having one at all.” l There are more than 160 million objects, such as pages, However, brokers should be aware of the What is clear is that failing to engage in social groups and events, which people interact with on Face- risks that are involved. Mr Newman explains networking, to some extent, is simply not an book with an average user being connected to 60 of that any flaws in a product will be discovered option for those that are looking to grow. While these and creating 70 pieces of content each month and shared quickly but points out that burying social networking may be all about personality, l Overall, users share more than 25 billion pieces of content your head in the sand is not a solution, add- rather than brands, positioning yourself as an such as web links, news stories, blog posts, notes and ing that it’s better to be aware of what people insurance expert in cyberspace will ultimately photo albums, each month are saying about you so you can mitigate any boost business visibility, which in turn will bring l More than 70 translations are available on the site and potential damage. financial benefits. about 70% of Facebook users are based outside the US Sites such as LinkedIn are also used by Social networking is not a fad. It’s an l More than one million websites have integrated with the recruitment consultants, raising the risk of increasingly popular way of communicating Facebook platform and over 150 million people engage headhunting, which is something that needs to in today’s world, with people using it in their with Facebook on external websites every month be taken into account. workplace as well as their daily lives. Hundreds l There are currently more than 150 million active users Mr Clements says: “The risk is that whatever of millions are using sites such as Facebook accessing Facebook through their mobile devices and you say, whether good or bad, can circulate at and millions more are logging on to LinkedIn those that use this platform are twice as active as non- high speed and it leaves a digital footprint. so you have to ask yourself whether that is an mobile users “Once you set foot in the social media world audience you can really afford to ignore. n

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Reportage: mobile phones An appy medium

Internet-enabledmobilephonesarethelatestvehicletobeusedto sellinsurancewithahostofappsalreadyinproduction.Liz McMahon explores how brokers should approach this new method of distribution

ust when you had got your head around it, the tries and has a Facebook fan club of 65,000. Jgoalposts for e-commerce have moved. Mobile Mr Mitra predicts that it won’t be too long before phones are set to overtake PCs as the most popular all larger insurers have their own apps. He says Axa’s web access device by 2013, according to a recent ‘Axadent’ app, which was designed for customers forecast by Gartner (reported in Insurance Age, July to capture information immediately in the event of 2010, p21) and people have started tentatively talk- an accident, has also been met with a “phenomenal ing about m-commerce. response” with 10,000 downloads so far. The recent launch of the iPhone 4G sold a record- Can apps really be broker friendly or are they smashing 1.7 million in its first three days and just a tool for insurers to bypass the middleman comparison site Consumerchoices claims that 54 and communicate directly with the customer? Not million smartphones were sold during the first three according to Mr Mitra who advises brokers to focus months (Q1) of this year – a massive 48.7% increase on how an app could direct business and help users

on sales during Q1 2009. to manage their account. Courtesy of Apple Like it or not, the customer gets what the cus- “Brokers should target the process of adding tomer wants and this is not a passing fad. Globally, cover such as another driver or car to a policy or businesses have been forced to consider how to wanting to drive abroad. The app should make it “If you create an app for one platform, what do all engage customers via their mobiles and even the so there is less need to physically call, freeing the the other phone users (customers) on the different insurance industry has started to sit up and take broker’s time to concentrate on other areas of the platforms do?” he asks. notice. But is it listening to the right people? business,” he recommends. Software analyst at Acturis, Basil Safwat, says that Barbara Ball has been in the business for 30 years The potential for broker apps is also something this conundrum was one of the main reasons Acturis and is currently head of operations and technology being taken extremely seriously by software houses chose to develop the mobile version of its client at broker Perkins Slade. She warns: “Brokers will and IT providers. service portal not as an iPhone-only app, but as a ignore new mobile methods of delivery at their peril. Ray Vincent, managing director of Transactor, has HTML5 app. The iPhone and iPad are the future and it’s now a been working with clients on what it sees as the next He explains: “HTML5 is the new standard of web- 24/7 environment. logical step for mobile apps – using them for renew- site development that allows the creation of advanced “If we are to deliver innovative and cost-effective als and as a quote-and-buy tool. functionality based on a set of open standards that is products to the ‘mobile’ generation, compatible with a wide variety of handsets. which by the way has nothing to do “As brokers can’t be sure which mobile devices with age, then we must embrace the If we can crack it, the connection their customers will be using to access their broker latest methods of delivering those portal, we have created a version that is compatible products.” between us and our customers is across a much wider set of handsets, without com- Mobile applications (apps) have been promising on user experience.” heralded as the latest method of distribu- strengthened and the commercial Brokers cannot complain of a lack of options tion and some insurance providers have angle will happen organically but anyone currently looking for a ‘one size fits already jumped on the bandwagon. Axa, all’ approach may be left disappointed. Matthew Nationwide and Endsleigh’s fledgling Paul Nicholas Palmer, head of strategy and innovation at Tata attempts could provide brokers with Consultancy Services, says brokers must remember inspiration of how best to exploit the nation’s obses- He says: “Love them or hate them, smart phones that mobile web access is a field that will continue sion with mobile phones. and tablets are here to stay and have a significant to evolve and unfortunately the goalposts will con- Endsleigh’s app allows for the purchase of quotes market share so we need to cater for them. But tinue to move in accordance with public demand already obtained via the web or call centre and Paul there are some browser technologies they will not and technological capacity. Nicholas, business project manager for Endsleigh, currently support, so we need to offer different “Brokers and providers have made the mistake says the company wanted the app to be more than a browsers to each community.” of wanting to be the first to market. Once the ini- sales device. Mr Vincent’s point raises an important issue – tial launch has been and gone, this can leave them He adds that it is “an uncomfortable requirement presently there are five main mobile platforms vying asking the question – what next? In the case of for a commercial organisation to work with but if we for consumer affection. While a business’ website smartphones, going to market as a quick follower can crack it then the connection between us and our can be viewed on them all, providers like Apple are may be far wiser,” he advises. customers is strengthened and the commercial angle desperate to hoard applications as they are perceived Therefore if brokers want a clear message, this is will happen organically”. as a valuable lock-in tool. as good as it gets: ignoring m-commerce is not an Ambarish Mitra, head of innovation at Axa, ech- IT provider, MV App Hub, offers a solution that option, but you may want to look extremely care- oes this sentiment saying that one of its apps has allows brokers to independently develop an app for fully before you leap. n “nothing to do with insurance”. ‘Stuck’, launched the iPhone with an option to create bespoke add- earlier this year, lets people who are stranded some- ons. Nevertheless, marketing director, James Scott, For the latest e-commerce news where post a message that can then be picked up admits that the diversification in platforms “is one of www.broking.co.uk/tag/e-business by recovery services. It already operates in 65 coun- the big industry problems we face in the future”. www.broking.co.uk August 2010 Insurance Age 37 Reportage: online security

Mr Graham says the key to cloud computing is ownership and retrieval. “The basic premise of storing data remotely is not new. Brokers that want to go down this route should focus on the contract. Who will have access? What will the rights of retrieval be? There is always a Safe storage risk in handing over data to a third party and the law is a messy and expensive way of having to resolve Astheworldofe-tradingmovesonapace,thelegalobligationsof disputes if things do go wrong,” he adds. The current version of the DPA was deliberately companiesthatreceive,storeanddisseminateclientinformation constructed to evolve with the changing nature of can often be forgotten. Liz McMahon examines the responsibilities technology. It is therefore necessary to keep abreast of any changes that come into force. Presently, there brokershaveinregardstodata is a campaign lobbying the Government to amend section 13 of the DPA. If successful, customers will also be able to seek recompense for non-financial owever painful the journey has been, brokers’ from the harm a breach of data can cause. damages such as reputation following a data breach. Hattitudes towards e-trading are changing. A Michael Graham, sales and marketing director at This could lead to an increasing number of cases recent survey found over half of the brokers (55%) software specialist Sequel, believes that the urgency being brought before the courts. wanted to increase their online presence. to have an online presence has led some brokers Currently the DPA requires that data be obtained To compete with direct insurers, effective online to leap into the world of online messaging without and processed fairly and lawfully. The personal client trading is essential for broker survival but this route considering the damage sending the wrong mes- information stored must be relevant, accurate and to market is not without its pitfalls. The hefty fines sages or contacting the wrong people can have on not excessive; it should also not be kept for longer dealt out by the Financial Services Authority to reputation, not to mention the consequent cost than necessary. HSBC and Nationwide Building Society following of redoing the Common sense so far but the condition that all high-profile data breaches hurt reputations as much work. personal data must be held with “appropriate secu- as pockets and act as a stark reminder of the over- rity measures” may ring alarm bells. How can a whelming importance of data security. broker be sure the measures taken have been Section 55 of the Data Protection Act (DPA) “appropriate” enough? 1998 gives the Information Commission Office (ICO) the power to impose “monetary penalty Ongoing process notices” and in April this year the maximum Mr Dunkley recommends brokers be fine possible shot up considerably – from mindful that data security doesn’t £5,000 to £500,000 to be exact. But don’t stop at the acquisition process and think the rules only apply to the big boys. if staff have access to sensitive The Government’s current information data there must be strict internal commissioner, Chris Graham, has been so processes running alongside the unimpressed with the online conduct of physical and IT security mecha- small to medium enterprises (SMEs) that nisms brokers put in place. last month he felt it necessary to issue an He adds: “The number of online code of practice for them. organisations that allow staff to take data out of the office, Privacy issues whether on laptops or memory At the time, Mr Graham issued the follow- sticks is amazing when you consider ing advice: “The benefits of the internet age the legal (and reputational) risks. are clear: the chance to make more contacts, Don’t do it. quicker transactions and greater convenience. But “There are also restrictions in taking there are risks too. A record of our online activity personal data out of the EU – you have to can reveal our most personal interests. Get privacy go through a process to get approval, even if right and you will retain the trust and confidence of you are moving it to the USA, for example. A lot your customers and users. Mislead consumers or col- of companies are looking at Indian offshore resources lect information you don’t need and you are likely “Re-key- – they need to bear this in mind.” to diminish customer trust and face enforcement ing information The standards and technologies that exist to pro- action from the ICO.” manually can lead to there being no single ver- tect data will adapt and develop as the online world With SMEs firmly on the ICO’s agenda, Peter sion of the truth and this is not uncommon in the becomes increasingly sophisticated. A broker can Dunkley, marketing director at broking software sup- London market. You must not open your business follow guidelines to the letter and purchase the latest plier Total Objects, makes the point that as insurance doors to the online world unless you have your software available but they will always be vulner- sits within the financial services sector, like it or not, house completely in order and this means having able to breaches caused by human error or indeed a broker’s security breach will be viewed rather more full control of your data internally,” he explains. intent. It is not enough to merely fashion policies critically than an online knitwear store. While larger brokers may be able to employ IT and procedures, however good they look on paper. While it may not be possible to ever be 100% security specialists to run a tight ship, this is not Implementation is fundamental and measures must secure, the increasing number of brokers starting to really an option for most SME brokers. A popular make it to ground level or they mean absolutely experiment with quote-and-buy tools online means solution to this problem has been to outsource e- nothing in terms of protection. All staff, from that putting effective protective measures in place commerce facilities to a ‘cloud computing’ firm. technical to sales, have to understand what security has also never been more crucial. Yes there are legal However, the ICO’s code has made it clear that this threats exist, what to do if a breach happens and hoops to jump through but they have been devel- does not mean brokers that choose this route are how to combat it effectively. You also have to trust oped for a reason: to protect all parties involved also outsourcing their legal responsibility. them to do it properly. n

38 Insurance Age August 2010 www.broking.co.uk Reportage: transactional websites

for business

By automating personal lines underwriting and providing clients with priate back-office functionality from the off. more than just a place to go window shopping, Kevin Child explains To really take advantage of the online environment, it is important that brokers seek to both sell how brokers can benefit from creating fully transactional websites and service their business online. When an online scheme takes off, the last thing the broker wants is to be left with an administrative headache that eats n the past 25 years, the personal lines market has is complex commercial, this may well be the case but into new profits. Ibeen through significant changes, driven firstly by there is rarely a personal lines or small to medium- For brokers that already have a website, it needs the telephone and latterly by the internet. sized enterprise scheme that has not been appropriate to be developed into more than a marketing tool to These changes have heralded the advent of a more to transact online. Equally, brokers can give clients give information about the company and its prod- commoditised personal lines sector and an increase the option of talking to an individual to ensure that ucts. Brokers now have the opportunity to turn their in the number of direct writers but in the face of help is always on hand during the online process. website not just into their shop window but actually this, brokers have adapted their business models suc- There has also been coverage in the media that into their shop and to allow clients from across the cessfully and remained hugely valuable and highly the quality of online business, in particular that from country to buy and service their products online. competitive for their customers. the aggregated channel, is not up to scratch. This is Even where a broker does not hold the pen for a In particular, brokers have continued to dominate not an issue as long as brokers are clear about the scheme and tends to submit applications to insurer in the more specialised areas of the market and, parameters of the scheme and the agreed guidelines websites or online trading platforms, it is possible to increasingly, the internet is showing itself to be a tool to underwrite the business. If these are established, push the bulk of the administration out to customers that can play just as important a role in these markets. autorated business will perform just as well as con- and generate significant efficiencies. Brokers run specialist schemes for everything from ventionally underwritten policies. It may take a broker anything up to half an hour laundrettes and caravans to jet skis and overseas to fill out and send off such an application and, in holiday homes. Whatever the scheme, there is little Reaching out many cases, the client will want them to do this. doubt that putting it online will open up access to a Traditionally, brokers with specialist schemes have However, there are many clients who would happily wider market while supporting it with a fully trans- tended to market them in the local area. However, fill in the application themselves if the broker web- actional website will cut administration costs and by making the scheme available online, brokers will site allowed them to do so. improve service levels to customers. significantly expand the size of their market. This not only keeps these clients happy but it also The challenge for every broker is to grow business In addition, brokers will be able to offer the saves the broker a significant amount of time and volumes without increasing headcount or sacrificing scheme to other brokers through this channel, fur- improves the accuracy with which details are keyed. service. Moving existing and future schemes online ther increasing their potential reach. Again, brokers speaking to their IT provider will is one way to achieve this. For brokers that decide to go down this road, find out how this functionality can be added to their Where a broker holds the pen for a particular there are several points to consider. In the first website and the timescales in which it can happen. scheme, automating the underwriting is relatively instance, simply creating an online quote-and-buy Everyone is aware of just how quickly IT is devel- simple. In essence, it requires the broker to speak to facility is not enough if they really want to take oping and the way buying habits are changing. its IT provider and discuss having an underwriting advantage of the increase in business volumes. Consumers and small business owners are now look- engine developed for the particular scheme in mind. For brokers that take schemes online but do not ing for and expect to find access to more complex Following initial talks, the IT provider will be able support them with an automated service that creates products and services online. to develop and deliver an underwriting engine in a the required documentation, enables customers to Putting scheme business on to the internet is one matter of months, which will enable the product to make mid-term adjustments and sends automatic very practical way that brokers can take advantage be autorated over the internet. renewal notices, then they are likely to be swamped of these changing consumer habits and open them- Some brokers may have concerns about taking by a mass of administration and associated costs. selves up to bigger markets. n their business online and fear that specialist schemes While they could hire more staff to handle this need to be negotiated in person. Where the business work, it is more economical to establish the appro- Kevin Child is director of SSP’s broking division www.broking.co.uk August 2010 Insurance Age 39 Challenging

“In a crisis, be aware of the danger - but recognise the opportunity.” John F. Kennedy

Inspiring Informing Challenging

PB Management Event 2010 | 6 October | Marriott Grosvenor Square | London

Insurance broking is evolving rapidly, creating The PB Management Event provides a central a constant stream of new challenges for forum in which to debate these challenges and broker managers. work together to deﬁne solutions.

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This event has been Sponsored by accredited by the CII and can be included as part of your CII CPD requirement should you consider it relevant to your professional development needs CoverReportage: Feature specialist products

Making commercial insurance products available online can create efficiencies for customers, brokers and insurers and has proved particularly successful in the standard SME market. Ian Wainwright asks if it is practical to sell specialist cover over the web Finding the right platform

n a 2009 survey, one broker, when questioned on In terms of feasibility, there is no doubt that back-office functions also passed on to the brokers, Ithe need to develop specialist commercial insurance online products and trading platforms offer brokers the insurers are able to return the cost savings online for the care and charity sectors, responded: “It and customers greater flexibility, speed of service to brokers in the form of enhanced commissions would be the best thing since sliced bread.” Although and more control over the whole insurance-buying – completing the win-win circle for the whole cus- not quite to the same degree, the sentiment was process. And there are individual benefits for all tomer-broker-insurer relationship. echoed by a large number of brokers dealing with parties involved. complex commercial insurance and the lengthy The efficiencies for customers include less time Just one option quote-to-purchase process at the time. One year on, spent filling in forms and going through responses Not everyone, however, has instantly embraced the and a great variety of commercial products are already to find a product that meets their needs. Addition- new products on the market. There are naturally available or are in development for web platforms. ally, online products enable faster quote comparison those out there that question the value for money Online commercial products are not a recent and allow customers to receive their insurance docu- and benefit of specialist commercial insurance online invention but, until now, the majority has been mentation at the point of purchase. and it will be the task of niche providers to assure standard cover for small to medium-sized enter- For the broker, the benefits of online trading are them of the quality of such products and services. It prises. Although perfectly adequate for many just as clear-cut and could be a major contributor will also remain their responsibility to ensure brokers businesses, it doesn’t meet the needs of more spe- to winning business in today’s competitive market. and customers know that online products are not cialised organisations such as charities, care homes Online trading platforms enable brokers to turn there to replace bespoke offline cover. The message or commercial heritage properties. A product that quotes around faster, meaning customers are more needs to be clear that online is only one possible fits the bill for a small corner shop, will certainly not likely to do business with them. Round-the-clock distribution route for products on the complex offer sufficient cover for a care home with a large self-service quote facilities give brokers more control insurance landscape and insurers will continue to number of residents and staff. It therefore goes with- over when quotes are obtained and online plat- provide a variety of trading options that meet the out saying that such specialist risks need specialist forms allow brokers to provide customers with their needs of all their customers. cover and products. But is it practical to make this documentation there and then. This means brokers Online specialist commercial products have insurance available on the web? are able to conclude business with customers much a market today and they will be increasingly in faster, leaving them more time and resources to deal demand by brokers in the future. Insurers will need Success stories with larger and more complex cases that are not to find ways to develop their products in line with Developing online products for diverse sectors with suitable for online platforms. these changing demands to remain competitive an abundance of specialist needs is not an and meet the diversifying needs of the broker com- easy task but it’s certainly not impossible. The munity. The number of products available online is initial success of such products has started to Insurers are able to return the growing rapidly and ones that even a few years ago prove the online trading sceptics wrong. seemed impossible to develop are now fast securing Even in sectors as varied as charity and cost savings to brokers in the their place. Making specialist commercial insurance care, it is possible to identify common risk form of enhanced commissions available on the web may not transform how the themes and similarities in requirements. entire market functions but it will certainly make This results in an online product, with some – completing the win-win circle buying it an easier task for many. n optional covers, that meets the needs of a large number of organisations. In sectors like char- For specialist insurers, one of the key benefits is Ian Wainwright is broker sales director at Ecclesiasti- ity it will, of course, never be possible to provide the increased quoting ability through an instant cal Insurance insurance for every organisation due to its complex- electronic system. Similar to brokers, insurers’ time ity, but online products can certainly create some is also freed from quoting less complex risks, allow- For the latest e-business news efficiencies for a large number of groups and the ing them to underwrite bespoke ones that don’t www.broking.co.uk/tag/e-business brokers they work with. meet the criteria for online trading. With some www.broking.co.uk August 2010 Insurance Age 41 The event where brokers do business

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IAN FOX, REGIONAL MANAGER FOR THE NORTH, ACE

r Fox has been based in Manchester for the past eight years and he is responsi- Mble for Ace’s northern businesses. Apart from the obvious geographical separation, he sees many differences between the Manchester and Leeds markets. In Manchester, he points out, the consolidators have struggled to gain any significant foothold, while many of the consolidators and at least one major network started life in the Leeds area. “There is a swell of independent brokers and some very good entrepreneurs in Leeds. There are some strong international brokers in this city and likewise there are some strong independents,”he says. Mr Fox picks out Leeds in particular as being a particularly vibrant market at the moment and he sees it growing more rapidly than Manchester but he points out that could simply be because Leeds is a less mature market and therefore has more capacity for growth. But it not just Manchester and Leeds that interests him – Liverpool is also in his sights. “We see some great opportunities in Liverpool and we are looking at ways to capitalise on that. The brokers there are quite proactive and there are some really talented individuals in the broking houses. “They will come into Manchester to trade when they need to but I personally feel that for an insurer to make the most of available business in Liverpool, they need to get over to the city,”he says. He admits that although he sees a very mature market in Manchester and Leeds, it is still usually the insurer that contacts the broker looking for business but says this changes when a corporate risk is on the table. But the main threat Mr Fox sees on the horizon is that there is still too much capacity in these two markets and rather than seeing that tail off, he is seeing still more arriving from London.

Lee

JOHN NEILL, MANAGING DIRECTOR, ALKER INSURANCE BROKERS Preston

his CCV-owned broker has been operating in Wigan for T70 years and Mr Neill believes remaining a ‘local’ broker is vitally important to its survival even though other local brokers in the area continue to disappear. “You have to play to your strengths in this market and for us that means being local. It’s very important – I always sell Alker to clients as a local broker,”he says. He says that the local market is as competitive as any- where else in the country and believes that although price is important, there is still room for expertise to shine through but is realistic Wigan enough to know it’s about tailoring the offer to each client. “Service is more important than ever before as clients are being flooded with approaches from other brokers. But price is important so we are always competitive. It depends on the trade and the client and what their financial situation Liverpool Manchester is,”says Mr Neill. “It’s about getting in early and understanding what position they are in. If we know a client is in financial difficulties, we are not going to concentrate on service.” He says that locally there are no signs of economic growth but he does see signs of stability. “It doesn’t help that the insurance market is trying to harden at the same time the economy is struggling.” Like many who answered our survey, Mr Neill sees opportunities in the behaviour of other brokers. “Local brokers give us great opportunities as when the economy struggles, they do too as they are isolated in terms of the reach they have. “A lot of brokers wait for insurers to come and see them. They shouldn’t wait if they have a risk to present to them. Too many brokers are too passive in their relationships with insurers,”he adds.

44 Insurance Age August 2010 www.broking.co.uk CoverRegional Feature review

STEVE MCGERR, BRANCH MANAGER, LEEDS, HISCOX

r McGerr arrived in the Leeds market from MBirmingham and although he admits that the local market is parochial (a trait that he appreciates) All quiet he says there is a lot of hunger. “This is a reasonably tight-knit community – most people tend to know the key players in the broking and insurer market,”he says, pointing on the out that brokers appreciate the presence of local underwriters. “It was refreshing for me to arrive in this market and although I was a new face, brokers were willing to listen to what I had to say.” He has a lot of faith in the local broking market: “Don’t underestimate North- the number of forward thinking brokers out there – some of them come to us with great ideas and new risks. There is an array of brokers here from the small independents to the large consolidators. There is a fair amount of buoyancy with the independent ones – they are acquir- ing books of business and expanding their geographical presence. western There is hunger in these brokers and there is an air of optimism.” In terms of competition from other insurers, Mr McGerr says that there is a reasonable amount of capacity in the local market and that all the insurers are hungry for business – perhaps a polite way of saying they are still willing to underwrite relatively cheaply to get the business front? in. But overall, he is very positive about the Leeds market. “The future is bright and we have seen businesses diversifying and adapting their skills to new industries. The healthy competition between “Things look like they are picking up here. Listening to brokers, it its two dominant cities, Manchester sounds like construction is turning a little which is important as the city is big for construction and haulage. We are beginning to see light at and Leeds, makes the North-west the end of the tunnel,”he says. insurancemarketanythingbut quiet. Martin Friel profiles some of eds theregion’skeyplayers

utside of London, there are really only two Oareas that have a strong insurer presence – the PAUL DOOLEY, REGIONAL MANAGER FOR THE NORTH, ARISTA Midlands and the North West. We took a look at the Midlands earlier this year and Birmingham fter 23 years working in Manchester, Mr Dooley should certainly be famil- staked its claim to be considered the second city Aiar with the local broking market. He says that although the make-up of of insurance but now we turn our attention to the the city may have changed – a growing financial centre – the attitude of its North West. brokers hasn’t. For the purposes of our review, we have surveyed “Manchester brokers want to remain independent and they are fiercely Insurance Age readers working in cities and towns protective of that. from Liverpool and Preston through to Wigan and The market hasn’t changed in those terms but they have had to get Manchester up into Leeds. Now before you deluge smarter,”he says. us with letters pointing out (perhaps correctly) that “The soft market creates a fierce rivalry and they have accepted that if they want to achieve Leeds should be considered a North-east city, we the desired turnovers, they need an efficient business operation. They need a proper pipeline of have taken the view that in order to talk about the discernible differentiators.” North West and Manchester in particular, it is neces- Mr Dooley believes that the Manchester market is over-broked and is aware that many are sary to factor in the impact of the Leeds market. r looking over the Pennines for new opportunities and although the market is generally still soft, there is a difference to the way insurers look at individual risks. Positive thinkers “There is a lot of rubbish out there,”he admits. From the results of our survey and having spoken “Most insurers are achieving rate increases on unprofitable business but there are still sub- to key individuals in various cities across the market, stantial savings to be made for good business. Clean business is being aggressively attacked there is optimism in this region that is perhaps not by brokers.” as pronounced in other parts of the country. Indi- He says that all insurers are contributing to this as are the brokers. viduals variously cite a hungry broking market that “It’s a dangerous game – some brokers are working for a very small fee hoping that they will believes it can rise to the economic challenges posed be able to earn on the extras applied to the policy. But you can’t do that too much without tak- and this is backed up by the results of our reader ing a hit on your own expenses.” survey. When asked how positive they were about And he has some concerns for the wider broking market. their business in 2010, 85% said they were either “Some brokers have told that they haven’t written new business for three months. It is the very or somewhat positive with the remainder feeling worst and most competitive market I have ever experienced. It’s a combination of economic fac- slightly pessimistic about their prospects. Tellingly,

tors and insurers trying to achieve rate increases when clients can least afford it.” none of those surveyed felt very pessimistic about 46▲ the immediate future.

www.broking.co.uk August 2010 Insurance Age 45 Regional review

Manchester cityscape

However, this optimism is tempered by con- describing it as a “vibrant market”. with service levels, in particular response times, cerns over the general economy. The majority And this faith in the local market is reflected providing accurate documentation and to com- of readers in the region (58%) felt that the in the opinion of our readers, 62% of whom municate with brokers more openly. But one economy would stagnate over the coming do not believe that the wider industry is too request that did stand out, not only because it 12 months with a further 18% believing that London-centric. However, this is by no means was repeated several times but also because it conditions would worsen. However, a buoy- an overwhelming sentiment as nearly a third appears to be a futile request, was for insurers ant 24% are feeling optimistic and believe the (29%) think that it is. to look beyond price. economy will improve. Perhaps this feeling that the market is no This mix of optimism and wariness is longer biased towards London is a manifes- Competitive nature matched by Mark Evans, head of Lockton’s tation of developments in e-trading. When Overall, our survey of this region reveals a Leeds office. He says that the food industry asked whether technology had made geo- market that is buoyant if cautious about the has been less affected by the recession than graphical location irrelevant in terms of future. Manchester and Leeds dominate, which other sectors but that construction has suffered trading, 58% said they believed it had but a makes it a unique region in the county. Most as have its related industries. not insignificant 37% felt that location was are dominated by one large city but here, two still important despite improvements in e- cities are constantly tussling and competing, trading and electronic communication. which creates what appears to be healthy com- Retailers have done well during Readers had a rather negative outlook when petition. Liverpool has all but been abandoned it came to identifying opportunities over the by the insurers with physical presence at a min- the recession. Those that have a next 12 months. It’s not so much that they imum but the broking sector remains strong. can’t see opportunities, they can, it’s just They have not let the insurer exodus hinder value for money offering have that nearly a quarter (23%) see the greatest their progress – they have simply built new generally performed well opportunities arising from competitors’ fail- relationships in Manchester and have contin- ings: “Poor service levels provided by our ued to prosper. There are musings from some Mark Evans competition”; “the failings of others”; “exploit insurers about how better to service Liverpool the shortcomings of our competitors”; “poor but there are no concrete plans as yet. “Perhaps there are green shoots but it is performance of competitors” are representa- There are, of course, brokers sprinkled still a sector where share prices are depressed. tive of many comments we received. Others throughout the region but it is clear that Man- Financial services are also a major component saw opportunities in insurers recognising the chester and Leeds control this region and will in the region as a number of building societies importance of small brokers while others were continue to do so in the long term. What will are based here,” he explains but he admits that looking to establish schemes with insurers in be interesting to watch is the rise and rise of it is a mixed bag with Skipton faring well but order to drive growth. Leeds. There is a general feeling that Leeds Bradford and Bingley famously less so. is growing at a faster rate than Manchester However, he can point to one sector that has Strengthening relationships but that could simply be because it has more done well. On insurer dealings with brokers and how they growing to do to catch up with Manchester. “We have a number of retailers on our could make the relationship more effective, However, if its rate of growth continues and books and the value retailers have done well over a fifth of readers (21%) wanted insurers Manchester’s relative stagnation persists, then during the recession. Those that have a value to give them access to underwriters: “easier the relationship between these old rivals may for money offering have generally performed access to knowledgeable underwriters/decision have to be readjusted if not reversed. n well,” he says. makers”; “more experienced underwriters”; He adds that there are enough opportuni- “having a key contact at the insurer so that we For the latest regional news ties to satisfy the ambitions of individuals both get to know each and the way we work”. www.broking.co.uk/tag/regional without them having to move elsewhere Other requests were that insurers get to grips

46 Insurance Age August 2010 www.broking.co.uk At the heart of the broking community

The site boasts: – 15 year combined archive – Regular broadcasts such as‘What the papers say’and‘An audience with’ – Digital edition of Insurance Age and PB – Polls and competitions – Weekly blogs – Exclusive reader offers – Access to the Broker Forum broking.co.uk What the papers say

A monthly look at who is moving where…

BROKERS Centor has announced the appointment Fearn commented: “Peter is a prominent Sedgwick’s London office. Insurance of Tony Efreme as manager of its prop- figure in the insurance market and has attorney Mark Kendall also joins as a LJM Partnership has made three senior erty owners division. Tony’s appointment had a successful 22-year career in the partner. They are joined in the move hires. Former assistant director at BNIB strengthens this specialist division and insurance industry. He brings with him a by Tristan Hall, who has become a Priestly, Paul Winterburn, has taken on is the culmination of a 17-year career, wealth of experience.” Sedgwick partner, and associates Lucy the role of sales and marketing partner, which started in Lloyd’s, before moving Dyson, Jason McNerlin and Duncan Kate Mellor has joined from the Bol- into the property sector 15 years ago. QBE has Strachan. The law firm said the move lington Group as technical sales partner Tony has previously worked with Layton appointed Mau- was a significant boost to its London and new account handler David Wells Blackham and Dawnay Day. Neil Walton, reen Robertson presence, and positions it to execute has joined the team from Country chief executive at Centor, said: “Not only as commercial growth plans and deliver services to Insurance Consultants. does Tony bring a wealth of UK and manager, leading the insurance community between its European based property experience to its business in Bermuda, US and UK hubs. Richard Taylor has joined Bartlett the team, he will play a major role in our Scotland. Mau- Insurance Brokers Group’s head office further expansion into the commercial reen joins QBE’s Equity Direct in Leeds as client relationship direc- property sector.” Maureen Robertson 20-strong team Broking (EDB) tor. Richard was formerly the branch in Glasgow, from has recruited director at Aon Leeds and chairman INSURERS Aon, where she was broking director Dan Lissaman of Aon Sheffield. Commenting on the for Scotland and the North of England. to strengthen appointment, Michael Bartlett, chair- PMI Health Group Maureen has 22 years of industry expe- its affinity man of the Bartlett Group, said: “We are has appointed rience, having initially started her career relationship very pleased to welcome Richard to Iain Laws as as an underwriter at Guardian Royal management the Bartlett Group. He brings with him account director. Exchange then moving into corporate Dan Lissaman team. He will be a wealth of knowledge and experience Iain will support broking, with independent Scottish growing EDB’s gained from the many years he has and develop the brokers Alexander Stenhouse and Serv- successful accounts with Renault and worked in insurance broking.” group’s strategy ice Miller and Company. Nissan prior to developing new busi- to grow its service ness in both the motor manufacturer Marsh has made several senior appoint- Iain Laws delivery to large Allianz Claims has appointed Jamie and financial services sectors. With ments to its Scottish National Corporate employers, specifi- Nicholson in the newly created role more than 10 years’ business develop- business following the acquisition of cally focusing on UK and international of customer service controller. Based ment experience in the industry, Dan HSBC Insurance Brokers. Audrey Cor- employee healthcare management pro- in Bristol, Jamie will be responsible for previously held positions at Jardine field has been appointed as leader of grammes. He joins from Enrich where identifying immediate service improve- Lloyd Thompson and Royal Bank of the Scotland, Northern Ireland and Isle he was commercial director and, having ment opportunities in the retail and Scotland. EDB’s portfolio of affinity of Man Region. Audrey was previously previously led their healthcare benefits commercial divisions, before reviewing partners includes Honda, Kia, Triumph, Head of Marsh’s office in Glasgow. She practice, brings more than 15 years’ the current service provision in relation Banco Santander, HSBC and first direct. will be succeeded in that position by industry experience including time with to customer requirements. Jamie will be Mark Turner, formerly of HSBC Insur- a major insurer and presidency of an looking to identify short-term actions Lorega has ance Brokers. Gordon Duncan will international benefits network. and longer-term recommendations to boosted its broker head up the Edinburgh office as deputy improve service and enhance the mar- development regional head. Ron Thomson has been APC has boosted its claims team to ket position of Allianz. Jamie has more team with two appointed regional client service direc- support its recent expansion into the than 20 years’ industry experience. appointments. tor and remains chairman of Marsh’s Republic of Ireland market. Eamonn Camilla Cook- Aberdeen office. Former HSBC Insur- Coakley, who has nearly 10 years OTHERS son, who already ance Brokers colleague Paul McGhee experience of working within the Irish works within the has been appointed as regional devel- construction and commercial combined Andy Beardshaw, former develop- Emily Pass executive team at opment director for Scotland. insurance markets, has joined APC as ment manager at SSP, has joined Open Lorega, has been claims handler. He joins from Atradius GI to manage the company’s Open appointed as a business development Keith Burnham has joined Bluefin Credit Insurance NV where he worked Trader team and enhance the platform’s manager focusing on the London and Insurance Services from Aon to head in an international role for the insurer commercial functionality. Andy has a high-net-worth markets. After placing up the strengthened real estate team while based in Australia. APC’s opera- development career spanning 25 years professional indemnity business for First- and is joined by Helen Goodey from tions director, Jon Bates, said: “Eamonn’s across a number of sectors. He was City Camilla helped established and lead Zurich as executive director. Ed Brown, appointment will bring valuable skills previously UK development manager the London Branch of TLO Insurance. executive director of real estate, joined to the business and support our expan- for SSP’s Sirius for Insurance Platform Emily Pass has also been appointed as Bluefin from Aon in April of this year sion plans for both the Republic of and prior to that, technical team leader business development manager for the and both John Johnson and Rob Ireland and other areas of Europe.” within the mortgages division of Ver- northern region. Emily joins from UKGI, Hunter will also be joining from Aon in tex Financial Services. He also spent a where she has spent the past two years the coming months. Stuart Reid, chief Peter Knowles has joined MMA as head number of years with advertising solu- as business development manager. executive of Bluefin Insurance Serv- of UK development. The role, which has tions company Double Click. ices, commented: “Our new real estate been created as part of the company’s If you have any new appointments division will develop stronger client plan for commercial lines development, A London insurance team has joined for the market moves page, please propositions with our insurer partners will report to chief executive Garry forces with the London office of email them to Liz McMahon at: and leverage the resources of our Fearn. Peter will be responsible for Sedgwick, Detert, Moran and Arnold. [email protected]. national branch network to grow this developing broker relations, overseeing Insurance lawyer Edward Smerdon All images must be print quality important part of our business. .” the business development team. Mr will become the managing partner of JPEGs and 300dpi

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News review: July Polly C A senior Aon broker admitted find information held by the Brendan Devine, reporting to [email protected] to dumping a laptop in a pond solicitors’ body about another MD of Fortis UK retail, Andy to cover up his involvement in partner at the firm. Watson. a major tender that allegedly breached the terms of his gar- Admiral signalled its intent The title of the holding dening leave. Euan Nicolson, to underwrite household company formed following who is now head of upstream products from 2011, in a the merger between Cooper and offshore construction at move set to impact its current Gay and US broker Swett & THE HOTTEST INSURANCE GOSSIP Aon, was told he could face white-label arrangements. The Crawford was not adopted by imprisonment at a pre-trial insurer’s own brands currently its subsidiaries. Chief execu- ince RSA began celebrating its 300th birthday, Polly has at- hearing on 20 July at the Com- offer household insurance via tive Mr Esser, formerly CEO Stended several of its soirees where its commemorative beer, mercial Court in London. He broker arrangements: Admiral of Cooper Gay, said only the brewed by Shepherd Neame, has been in copious supply. It was no is set to face a full hearing any and Bell in a partnership with executive team would work different when she attended its launch of RSA online at the British time from 4 October, where he BDML Connect; and Diamond, under Cooper Gay Swett and Music Experience in the O². As she mingled with brokers taking a will be accused of breaking the Elephant and Gladiator going Crawford, while the rest of the nostalgic tour through various musical decades, the brew seemed to terms of a court order issued through Heath Lambert. staff will continue working be going down a storm. She started chatting to managing director by Marsh. Marsh declined to David Stevens, chief operat- under the individual brands. of commercial, Paul Donaldson, as one of the drink-laden trays was comment while Aon said it ing officer at Admiral, said He added: “In Germany Cooper doing its rounds. Worried out of courtesy she would have to opt does not comment on indi- the business would continue Gay operates as Junge and in for RSA’s tipple (Polly is more of a Chablis girl), she was relieved vidual employee matters or with its existing contractual Canada we operate as Cree- and somewhat surprised when Mr Donaldson openly shunned his legal proceedings it may be obligations and that it had church and we do very well company’s own beverage and opted for a bottle of lager. Polly can involved with. not yet been decided whether with these brands.” only assume RSA’s beer is an acquired taste. the product would be used Former Erinaceous boss in conjunction with Admiral’s A new broker launched Andy Halstead returned to partners or as a replacement. by former Broker Network lobalisation is an important issue and Polly understands that the insurance market with a employees is set to rival Git has had a huge impact on how the industry now mitigates property venture called Rent Iprism chief executive, Gary Towergate’s recently merged international risks. But that is probably not the main reason why she On Time. Although the Ches- Burke, revealed his business Manchester operation. BLS attended Lloyd’s globalisation conference if truth be told. Polly loves ter-based business went live moved into profit four years Insurance Services will be a role model and was very excited to hear how the dynamic journal- in March, Mr Halstead did not after its launch and was now headed up by former direc- ist Kate Adie would bring this issue to life. She did not disappoint, officially join as chief execu- transacting above its breakeven tor, Steve Boardman, and speaking passionately about how risk may change in context but the tive until 1 July, according to point at £1.5m gross written ex-network members Ian main sentiments of the four horsemen of the Apocalypse remained. Companies House. The launch premium (GWP) a month. Mr Frazer, and Brian McGlaulin. Oooh very dramatic, but one thing Polly didn’t realise was that Ms marked Mr Halstead’s first Burke said he expected it to Lesley Briggs, a former partner Adie has a degree in Icelandic, which led her to claim that she must move within the insurance exceed £2m a month GWP at Broker Network member be the only journalist capable of pronouncing Eyjafjallajökull, rather industry since leaving Tower- by the end of the year, record Wyndale, completes the senior than merely referring to it as the Icelandic volcano. Given her own gate-owned Paymentshield at around £14m GWP in total management team. The start- sorry attempts, Polly has to say she believes her. the end of last year, following in 2010, and was confident it up, granted approval by the a reshuffle within the group would hit £25m-30m by 2012. Financial Services Authority on in which former CCV CEO Tim ”I thought we would have 1 June, has emerged after Tow- he subject of claims referral fees as always seemed to have Johnson succeeded Stuart Pen- been breaking even last winter, ergate’s merger of North-west Tsomething of the cloak and dagger about it as far as Polly is der as CEO of the company. so perhaps we are six to nine Broker Network businesses. concerned. Brokers like to play their cards close to their chests and months behind schedule. But all this secrecy intrigues Polly. Let’s face it, subterfuge is pretty thin The Court of Appeal decided as an underwriting agency we Royal Bank of Scotland on the ground in insurance and she has to get her kicks somewhere. to uphold an earlier ruling have put our stall out to have Insurance subsidiary NIG was When she attended Callcredit’s seminar on fraud, she listened to denying Quinn Direct access comparative wordings,”he said. the only one of its major four a very informative breakdown of costs in the motor industry from to confidential information on brands to record a loss in Groupama’s Laurent Matras. However, when Mr Matras discussed a small firm of solicitors that Fortis UK secured access to 2009. The broker-only insurer an average figure for brokers’ fees, she was distracted by two bro- it insured. The insurer lost a the Kwik Fit group’s database made a pre-tax loss of £87.7m kers’ giggling and whispering, “And the rest!” Someone is clearly High Court battle last October of motor repair customers as in its year-end results for 31 getting more than their fair share of the pie it would seem. to access Law Society files well as the brand for a mini- December 2009, compared on South Bank Solicitors to mum of 10 years as part of its with a £52m profit in 2008; and which it had sold professional £215m acquisition of its insur- a £63.1m loss overall (2008: olly likes to see a trend run its full course so was heartened to indemnity insurance. Quinn ance intermediary arm. The £37.1m), according to results Plearn that football teams large and small have been looking to insured the two-partner firm deal, expected to close in the registered with Companies the insurance world for sponsorship. Aon’s four-year shirt sponsor- in October 2007, only for it to third quarter of this year, will House. The revelation came ship of Manchester United, which reportedly set the insurer back be closed down by the Law see Kwik Fit Insurance Services four months after RBS revealed £80m, has been widely covered in the press with Aon president Society a few weeks later, as (KFIS) joining Green Insurance the insurance arm’s overall Greg Case claiming it would be “difficult to find a stronger fit claims against the firm began Company and Express Insur- group profit had decreased for Aon than Manchester United”. However, did you know that to emerge. Quinn later decided ance as a subsidiary of Fortis more than £500m year on Nantwich Town Football club has also sealed a “major sponsorship it had enough evidence to UK. Fortis confirmed KFIS’ year to just £58m in 2009, with agreement” with County Insurance? The local firm’s Insurance4y- not cover a claim against one existing management would it recording a £170m loss in our brand will adorn the first team’s shirts. The forthcoming pre- of its partners, citing ‘dishon- continue to run the busi- quarter four, its first ever quar- season games against Stoke City and Crewe Alexandra will be the esty’, and was attempting to ness with managing director, terly loss. first opportunity for the boys to show them off.

56 Insurance Age August 2010 www.broking.co.uk