I was comforted to read the editorial in your January 27 edition (p4) talking about brokers in the UK having to be either big or niche for survival. I have been saying the same thing to the provincial brokers that I have been meeting with since July 1998.

To date, I have met more than 50 IBRC registered, independent, provincial brokers to propose the partnership that we at Willis Commercial have developed as our Willis Commercial Network. In framing this partnership, we did extensive market research on provincial brokers in the UK and determined the same thing that you indicated in your editorial.

Of all of the brokers interviewed during the market research phase and the brokers that I have spoken to direct since July 1998, approximately 40% of them in the past five years have been through either a merger, an acquisition or a sale of their business.

Virtually none of those brokers feel that their business will look the same in five years' time as it looks today nor do they think there will be any new entrants into the provincial broker segment. In the way that you state, they see their future survival through a limited number of alternatives ie. acquire other brokers, merge with other brokers or sell their business to other brokers. No-one thinks they can survive by staying the same as they are today. As you point out, to them, survival is based on the perception that they have to get bigger; this means scale and leverage.

It is interesting that in the same edition, you point out that AXA intends rewarding its top 200 brokers. You did not define what the criteria for the top 200 brokers is but I imagine that it is size.

No-one, however, knows what the optimum size is or will be. Also, it is not just a question of size in relation to dealing with the insurers. Size also has a fundamental significance in terms of these brokers' relationship to their software house. In some ways, they have to be much bigger to get the software house attention than they do to get their insurer's attention.

We will move to a more American-style approach on agencies. Being American and having worked in both market places, I understand the issues relating to both. We have also built some of this into our Willis Commercial Network proposition which affords the brokers that we talk to and which come into our Network, a fourth alternative for survival.
Chief Executive
Commercial Risks

Is this the end of customer service as we know it?
I hear from the radio that the two "insurance giants" are to merge to make a single company. Has anyone told Norwich Union that CGU is still, in effect, trading as separate entities in the general market?

There has been much speculation and comment over the level of service given to brokers, and in turn, clients, by the CGU and NU since their last mergers. What is going to happen now?

I look forward to a strong message from the combined board of CG&NU confirming that service will not be sacrificed with jobs and that jobs will only be cut, and products only merged, once fully-integrated systems for administration, accounts, claims and policy issue are in place.
Ian K Mantel
via e-mail

GISC shoots from the hip
If the GISC is reduced to promoting itself by attempting to have articles published in hobby magazines to attract public awareness, (Backchat, February 10) who will write the articles?

I hope that the GISC will use professional journalists or public relations consultants, otherwise doesn't that call into question the legitimacy of their raison d'être - to ensure insurance intermediaries act professionally?

If they do they will require payment. Has the GISC no promotional budget? Could it be that in attempting to shoot itself in the foot, it has shot itself in the groin, again?
Peter West
Acorn Insurance Group

Tracking down stolen plant
In the claims supplement (Insurance Times, January 27, '£400,000 of plant is stolen'), you highlighted the problem of plant theft.

The Home Office publication, The Nature and Extent of Construction Plant Theft found that during 1997, 24,192 items of plant were reported stolen with an estimated value of £66 million.

This is not surprising when 22% of victims chose a padlock and chain as their primary security measure.

Additionally, less than 3% fitted an alarm, immobiliser, tracking device, or some sort of specialist lock.

During the month featured, TRACKER Network successfully recovered £121,000 of stolen plant in the UK.
Dennis Lavers
Insurance Liaison Manager
TRACKER Network (UK) Ltd