AXA distribution chief warns of threat to insurers from retail brands

Mark Cliff, AXA's distribution director, declared this week that the "distribution war has never been so intense" sparking intense debate over whether brokers have a place in the future of insurance.

Speaking at the CII Insurance and Financial Services conference, Cliff said insurance business models were "standing on shifting sands" as the digital revolution gathered pace.

He warned of fierce competition against insurers from major brands that were moving into financial services and "blurring the distribution lines". He questioned whether high street retailers would wipe out traditional insurers, as "we haven't got the brand to compete".

Existing business models, said Cliff, were in need of an overhaul - with a focus on service - if they are to survive against major retail names. "We are built on legacy systems which don't look at customer service," he said.

Sandy Dunn, chief executive of BDML Connect, said the advances in online technology would soon mean that customers were buying insurance "face to face online". This, he said, would increase the emphasis on service levels.

"Broker distribution is in the minority, far more people are going direct," he said. Online distribution, he added, would increase the need for added value products, especially given the increasing tendency of consumers to demand high-quality products with the minimum of purchasing effort.

But brokers insisted that their position was secure, with many more buyers wanting a personalised service. "This is scaremongering, which is unfair to brokers," one broker source told Insurance Times. "The insurers are trying to scare brokers into renting capacity from them, which will broaden their distribution channels and leave brokers with little power."

Lee Gladwell from the CII suggested that the market would divide into commodity products and those delivered to customers relying on a trusted adviser.