But insurer has no plans to start underwriting business itself
The ‘very challenging’ nature of the motor insurance market was the reason behind Legal & General (L&G) not underwriting private motor business when it entered the business line in February, according to director of general insurance Mark Holweger.
Speaking to Insurance Times following the release of L&G’s financial results, Holweger said the insurer instead entered into a distribution partnership with Junction for L&G branded products as a way to expand its product offerings and test the market’s reaction to the brand.
“It’s a good way for us to see how our brand works in the motor market and how our customers respond to having the Legal & General brand in that market,” Holweger said. “We want to expand our product range and our offerings to customers, and in order to do that we are going to have to broaden our minds as to where we go and how we do that.”
And Holweger said this approach to entering the motor insurance arena was in response to the regulatory and pricing difficulties currently facing the motor market, where rates have fallen by as much as 13% in the last year.
“It’s a very challenging market with a lot of downward pressure on rates and lots of changes around regulation, so it’s not something we are going to go running into,” he said. “We are going to be very considered in our approach and right now our approach of distribution works very well.”
“From our point of view, the partnership with junction is working very well. We are very pleased and it’s doing what we wanted it to do, but there are no immediate plans to start underwriting,” he added.