Halifax Bank of Scotland (HBOS) has abandoned plans to use its banking relationships to sell business insurance due to insufficient expertise in commercial lines
The banking giant this week struck a deal with Smart & Cook that will see it pass on commercial broking leads to the broker.
Peter Thompson, head of Bank of Scotland (BOS) commercial insurance, the commercial broking arm of HBOS, told Insurance Times the deal was done because the bank needed "better expertise" than was available in-house.
Under the arrangement, to begin on 1 January, Smart & Cook will service customers from BOS's corporate banking division with a turnover exceeding £1m.
The initial deal is for five years, but Thompson said it was likely to be extended. "It is not our intention to move it back in-house."
The move represents an abrupt U-turn in HBOS's insurance strategy. In May, Thompson outlined ambitions to make HBOS a top 20 commercial broker within three years. At that time, BOS commercial insurance had gross written premiums of about £30m.
Under the previous arrangement, customers with a turnover of less than £1m were serviced by Royal & SunAlliance through its Enterprise proposition.
That arrangement will continue.
Customers with turnover exceeding £25m were previously referred to Alexander Forbes, Marsh or CBC UK, but will now be serviced by Smart & Cook.
Paul Meehan, Smart & Cook group managing director, described the deal as "absolutely fantastic".