I write following the recent exchange of comments on 'network promises'. In our capacity as independent researchers, we frequently take soundings across the industry.

While it is certainly worthwhile noting the views of the network 'maestros' such as Grant Ellis and Steve Burrows, it is of course worth bearing in mind that such views are polarised, and while important and valuable, they should be weighed against the available options.

Recently we have been investigating the performances of various networks, based on the perceptions held by their varied membership. Although there are resounding "yes it's great" responses, a majority of those currently within networks appear resigned to continued membership, not because the network offers them improved business performance through a true partnership, but because no membership equals no business.

While much talk of FSA compliance issues certainly features as a reason for joining, in one large network over 37% of respondents cited market access as the driving force behind their membership (compared with only 17% that cited FSA compliance alone).

The belief, well founded or otherwise, that insurers are increasingly refusing to deal with the smaller brokerages suggests that the name of the game is survival.

But are the network members' aspirations being met? If market access is being sought is it being realised, or, as Steve Burrows succinctly puts it, are "member's profits... [being] severely compromised"? The cost of membership ranks highly among member concerns. Across one large network 44% of its members cite some aspect of market access, products/schemes availability or cost as the most important area for improvement.

The concepts of partnership and co-operative could be explored more thoroughly by prospective network members. For any broker or intermediary who considers that survival is forcing them into network membership, the initial issue is not to consider which network to join and what ten questions I should ask, but more importantly what are the options that can be considered and what are the pros and cons of each? Do I have a strategy for survival or am I simply reacting?

David Atkinson
Managing principal
Broker4Broker

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