Tom Broughton, editor
And so it goes on. Oval boss Phillip Hodson revealed a vivid picture of the kind of pressure that insurers face during the underwriting process at the inaugural Insurance Times’ Broking Forum last week. He described how brokers should be viewed as the sales force of the manufacturers, and as such, “partnering” should be the order of the day.
Hodson’s point is that there really is no need for adversarial relationships. Along with rival consolidator Chris Giles he pointed to tensions as some insurers misjudged the mood to hammer commissions or walked away from the deal. Perhaps there is a very good reason for this. After all, have the kind of commissions being demanded over the past two years really been in the spirit of partnering? Especially if the deals on the table were unsustainable? You may conclude there is nothing new in this kind of spat, except that the resulting declining revenues coupled with falling investment returns have created enough panic to kick-start a new spirit of co-operation, new faces around the table and fresh negotiation with certain personalities pushed to one side.
Notwithstanding the very public kicking that consolidators have taken in recent months, the reality of the economy has also revealed the extent of the power they wield, as well as how vulnerable insurers can be.
Meanwhile, on the same stage independent broker David Slade revealed how recession is losing him millions of pounds in premiums, as key clients go bust. If this reveals anything, it shows that this debate will continue but it is fast becoming as much about survival as it is greed.
Business doesn’t have to mean boring
We had some fun with LV= this week, dressing them up Reservoir Dogs-style for the front cover. But there’s a serious message there too: O’Roarke and co really do mean business. They are cleverly recreating the RBSI model that they know so well, with many of the same staff – and even some of the same clients. Against the backdrop of the floundering motor market, can an entrepreneurial company where the bosses dress up in sunglasses do better than a hidebound, government-backed multinational with a boring corporate culture and legacy of overbearing executives? It would be nice, wouldn’t it?