We broke the story, but what will happen next, asks Andy Cook

While the Daily Mail, in its markets column last Thursday, was "shocked" by the acquisition of Churchill by Royal Bank of Scotland, Insurance Times' readers had four months warning to prepare for the opportunities that will inevitably be created by the merger of RBOS' Direct Line and Churchill.

The £1.2bn price is at the top end of what was expected and will be difficult to swallow. But RBOS does not have a track record for failure when making acquisitions, so one can only assume that it has done its sums correctly.

Jobs will go in their hundreds, especially in motor and household where there is a management overlap. Group admin will also come under close scrutiny. This will provide opportunites for rivals to pick up many skilled workers who benefited from Direct Line and Churchill's class-leading human resources philosophies.

What are the other opportunities? Well, brokers will be concerned to find out what the plans are for Churchill's broker-focused insurance company NIG. As revealed in Insurance Times last month, plans have been hatched for a management buy-out with Churchill Group's John O'Rourke touted as its head. Allianz, AXA and any number of other insurers (domestic and foreign) will be interested. (Although many will be wary of a book of business that has been acquired at aggressive rates over the past couple of years.) The uncertainty creates an opportunity for other broker-focused insurers to step in and leverage their short and mid-term stability.

The other area where insurers will be keen to move swiftly is corporate partnerships. Churchill had a very large account as Lloyds TSB's private motor supplier. RBOS is a bitter rival of Lloyds and so a switch of insurer would seem to be on the cards.

The managers of motor panels at the AA and other intermediaries will also be looking for an indication from RBOS about future philosophies. The intermediaries have shown through their use of Churchill that they can live with insurers who deal direct and though broking channels. So, we should not, perhaps, expect any changes.