Can Willis Networks survive after it failed to renew a 13-year, £70m GWP partnership with Aviva?
Can the all-powerful networks survive? That is the question many people are asking after Aviva and Willis Networks failed to renew their 13-year panel partnership worth £70m gross written premium. This will be a huge acid test for Willis and its influence on its members.
Aviva pulled out because about one-fifth of the commission placed by network members goes to Willis. That’s a chunky remuneration considering the parlous state of the commercial insurance market. So Aviva wanted a better deal, Willis disagreed, hence the split.
Now here’s the interesting part: can Willis continue to satisfy the big boys remaining on the panel: RSA, AXA, Allianz and Zurich? They’ll know that Aviva is trying to go around the back of Willis and scoop up business with members.
What they’ll want to see is that Willis has influence over its members and that they show loyalty to the network ethos of sticking together. That means members placing business with them, and on harder rates.
For Aviva, this is a calculated risk. Rival insurers will be rubbing their hands in glee at the thought of taking away Aviva’s business. Aviva could lose out on volume: the insurer lost nearly a billion pounds in premium when previous UK head Igal Mayer got tough with consolidators.
However, Aviva wouldn’t have taken this action if it had failed with Broker Network. In that case, Aviva ended the deal and is seemingly quite content that it is still winning business from Broker Network members.
These decisions by Aviva boil down to trying to navigate a tough commercial market while paying juicy over-riders and commissions to network members.
The sun probably isn’t quite setting yet on the empire of the networks, but the outlook is certainly less bright than it used to be. And if Willis can’t win over its members to favour the other panel members, it will be lights out.