...but looming over-capacity may lead to poor customer service, says Andy Cook

Ask brokers about Allianz Cornhill and you will get some encouraging comments. Typically, brokers will comment about the well-thought-of engineering business, commercial legal expenses or even the large London property cover portfolio.

Brokers will also say that Allianz Cornhill is the tallest of the dwarves when it comes to service. And that is one of the frustrations. Brokers generally like doing business with Allianz Cornhill when they can, but many brokers are not able to put that much business through the company because it has not supported small and medium sized business with quite the brio of NU and AXA. Well that all seems set to change.

Andrew Torrance, the man who replaced Ray Treen, at the top of Allianz's UK operation this summer, has initiated a number of changes that will see a different Allianz Cornhill from 2004. One of the most significant is that Allianz Cornhill will be beefing up its SME presence. And the man charged with making it happen is Chris Hanks (see interview page 15).

Brokers should rejoice that they will have another market to choose from and one that has some credibility for service. The move will worry some of those companies that are trying to get stuck into the SME market, but will not have the muscle to negotiate the better commissions that the big composites can.

One word of warning for all is that the SME market is rapidly heading towards being oversupplied with capacity - everyone wants a bit including the Royal Bank of Scotland.

On the face of it, oversupply cannot be a bad thing for clients and their brokers, but as everyone has found in the motor markets, it can lead to reductions is service quality as carriers try to claw back costs to cover the lower income per policy.