Our industry seems determined to continue loss making market share initiatives. They do nothing but create the premium reducing cycle that ensures poor underwriting results all insurers bemoan.

The latest to join in is AXA, who via AXA Direct (the old Pru boys) have struck a deal with National Australia Group of Banks (Yorkshire Bank and others) to promote SME business. The bank is writing to all its customers offering the initiative.

Conversations with some bank managers have indicated they are cutting out the middleman's fees (the broker) by offering a quote from AXA not mentioning its AXA Direct or its office in Glasgow.

It would not be difficult for AXA to maintain its position as a broker-supporting company if it implemented a direct net-rated initiative at a sector known to be mainly broker controlled.

AXA has an internal protocol whereby AXA Insurance (broker arm) and AXA Direct are both involved in a risk that AXA Direct quotes net terms for the risk which AXA Insurance would have quoted.

Both AXA arms I would suggest have similar operational costs, except that AXA Direct will have the additional customer servicing costs and FSA compliance costs coming out of a net broker rate. And with this initiative presumably there is an additional cost, the financial benefit to the bank, also coming out of a net rate. It sounds like a recipe for disaster.

Dave Mackie