Insurers have moved to counter intermediaries' concerns over a potential conflict of interest brought about by Direct Line's acquisition of motor assistance company Green Flag.

Members of the AiiB have expressed unease that Direct Line might obtain access to Green Flag's database of customers, presenting golden opportunities for cross-selling of its products.

AiiB director Laurie de Mel said the acquisition was a "classic case" of a direct operator acquiring a company's customer base to expand its own business.

But Zurich, which is one of several insurers with customers served by Green Flag, said it has taken steps to prevent this.

Andrew Harvey, managing director of its personal lines division, explained: "We have a written agreement with Green Flag ensuring the complete segregation and confidentiality of all Zurich-supplied data."

He added that insisting on such a safeguard was now standard practice with the recent trend for mergers and acquisitions.

Zurich's assurance has been supported by Green Flag's new parent, Direct Line, (see letter page six).

Ian Chippendale, chief executive of the direct writer, said: "We can categorically reassure Green Flag's clients that Direct Line will not have access to their intermediary customers, this data is protected, confidential and the commercial agreements are fully respected."

He went on to argue that the combined operation will provide greater efficiencies and underwriting skills making the company a strong competitor for AA and RAC.

He concluded by saying that Green Flag could now not only maintain its position as the third largest breakdown service, but grow the business.