NFU sells to rival with no redundancies
Brokers have welcomed NIG's takeover of Avon Insurance's 2003 renewals, saying it should increase competitiveness among insurers.
Last week NIG announced it would invite renewal of Avon's intermediary-based personal and commercial lines business from January onward.
Broker-only insurer NIG, part of the Churchill Group, had a gross premium income of £758m last year.
Avon, a wholly-owned subsidiary of NFU Mutual, had a gross premium income of £166m last year.
The transfer of Avon's business will comprise 45,000 commercial and 305,000 personal lines policies.
Financial details of the transaction have not been released.
The Broker Network managing director Grant Ellis said he expected the transfer to give Avon more freedom to operate.
"Avon's departure from NFU ought to increase competitiveness, considering that NFU used to prohibit Avon from competing in similar markets," he said.
Ellis said the transfer could also lead NFU to branch out of agricultural insurance, now that it was no longer tied by Avon.
He said: "What is ironic is that NFU has sold off its Avon business to a player that is also competing in the agricultural sector."
All of Avon's 11 branch offices and about 180 employees will be transferred to NIG, avoiding any redundancies.
NIG commercial director Charles Earle said NIG had no plans to re-brand Avon's products or drop any of its loss adjusting providers.
"We don't have a formal, publicly appointed loss adjusting panel and neither does Avon, but we do both use a group of loss adjusters," he said,
"There are no plans to change that because of the Avon transfer, not to say that these things won't happen in the future."
Earle said broker response to the transfer had been positive so far.