Article date: 1 March 2005
Norwich Union has acquired its 100th book of brokerbusiness – and is anticipating a steady level of acquisitionactivity in 2005.
This takes the value of purchases in the past 18 months to £58mand covers 145,000 customers.
Despite an anticipated deluge of brokers exiting the market,the majority of those selling to Norwich Union are continuing totrade and re-focusing their businesses, according to thecompany’s head of broker solutions, David Leary:
“As many as 80 brokers have sold their personal linesbook to concentrate resources on developing their commercialbusiness and identifying the most profitable lines.
“Most have chosen to off-load their personal book througheconomies of scale or because it was either a marginal orloss-making piece of business.”
An unexpected development of acquisition has been the amount ofrepeat business being generated. Leary explains: “Somebrokers are conducting a ‘staged exit’, firstlyselling their motor book and then following up later with theirhousehold book.”
Brokers selling their books to exit the market altogether arebeing influenced by a readiness to retire or the impact of FSAregulation, according to Leary: “It is allowing thesebrokers to make an orderly exit without leaving orphanedclients.”
Leary continues: “It’s an achievement to havereached this point in 18 months, which must be attributed to ourconsultative approach. By gaining a true understanding of brokersplans and aspirations, we have been able to help their decisionmaking process”
“Rather than acquisition being a controversial concept, itis filling a need in the ever-changing broker market place.
"Some key challenges remain for large parts of the brokermarket, primarily a huge age time bomb, with many brokers facingdiminishing profits through falling premiums and increasing costsof trading and FSA regulations.”
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For further information, please contact: Jon Clements atStaniforth on 0161 274 0100/ 07989 414486 or David Ross at NorwichUnion 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 ofaround 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 ofdistribution channels including brokers, corporate partners such asbanks and building societies and Norwich Union Direct.
Authorised and regulated by the Financial Services Authority
Members of the Aviva group