Rates are still soft. Quinn’s demise shows no sign of turning the market. And if Europe remains in a state of volcano paralysis for much longer, then that double-dip recession politicians keep touting around may be a lot closer than you first imagined

This week, AXA and NIG are the latest insurers to offer commission incentives to brokers on new business, following the lead of Aviva. Philippe Maso will be nervous about AXA’s loss ratio number, but he won’t want to sacrifice market share in the same way that Aviva did so disastrously last year.

The underlying problems prompting Aviva’s strategy have not disappeared, however. Rates show no sign of improving, the overall pot of insurance expenditure is diminishing, and a distorted renewals market continually churns out winners and losers to the cost of all. If the economic landscape is to deteriorate all over again, then there will be no growth.

Brokers are already finding the market extremely challenging and are struggling to make a case to cashless clients. You only have to listen to the pessimistic words of Heath Lambert boss Adrian Colosso to see the full extent of a stark picture. But in the meantime, does size really matter? Or does it just depend on who you are and, importantly, what your shareholders want and need? It’s time to decide all over again.

Which way for Quinn?

The Quinn debacle is getting messier and messier by the day. Quinn Insurance is now in administration following strong-arming by the Irish financial regulator in a deal that Quinn hopes will see it open again for business in the UK. The longer it goes on, though, the more damage is being done, and you can expect the administration to drag on as sale documents are circulated and the Quinn empire re-evaluates its position.

The FSA is saying that it wants guarantees from the Irish regulator that it would cover any cost of future failures in the UK, rather than having any bail-out money come out of its own coffers. The market, meanwhile, continues to watch the disarray and wonders where it will all end, who will buy the business out, and if private equity has any appetite to take it on. IT

tom.broughton@insurancetimes.co.uk.

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