Norwich Union has acquired its 100th book of broker business – and is anticipating a steady level of acquisition activity in 2005.
Norwich Union has acquired its 100th book of broker business – and is anticipating a steady level of acquisition activity in 2005.
This takes the value of purchases in the past 18 months to Ł58m and covers 145,000 customers.
Despite an anticipated deluge of brokers exiting the market, the majority of those selling to Norwich Union are continuing to trade and re-focusing their businesses, according to the company’s head of broker solutions, David Leary:
“As many as 80 brokers have sold their personal lines book to concentrate resources on developing their commercial business and identifying the most profitable lines.
“Most have chosen to off-load their personal book through economies of scale or because it was either a marginal or loss-making piece of business.”
An unexpected development of acquisition has been the amount of repeat business being generated. Leary explains: “Some brokers are conducting a ‘staged exit’, firstly selling their motor book and then following up later with their household book.”
Brokers selling their books to exit the market altogether are being influenced by a readiness to retire or the impact of FSA regulation, according to Leary: “It is allowing these brokers to make an orderly exit without leaving orphaned clients.”
Leary continues: “It’s an achievement to have reached this point in 18 months, which must be attributed to our consultative approach. By gaining a true understanding of brokers plans and aspirations, we have been able to help their decision making process”
“Rather than acquisition being a controversial concept, it is filling a need in the ever-changing broker market place.
"Some key challenges remain for large parts of the broker market, primarily a huge age time bomb, with many brokers facing diminishing profits through falling premiums and increasing costs of trading and FSA regulations.”
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For further information, please contact: Jon Clements at Staniforth on 0161 274 0100/ 07989 414486 or David Ross at Norwich Union on 08703 66 68 65/07800 699665.
Notes to editors
Norwich Union Insurance
Norwich Union is the UK's largest insurer with a market share of around 13 per cent
With a focus on insurance for individuals and small businesses, Norwich Union insures:
- one in five households
- one in seven motor vehicles
- more than 800,000 businesses
Norwich Union products are available through a variety of distribution channels including brokers, corporate partners such as banks and building societies and Norwich Union Direct.
Authorised and regulated by the Financial Services Authority
Members of the Aviva group