Tom Broughton says Biba has no need to merge with the IIB
The IIB has no choice but to merge with Biba if its campaigning principles are to be safeguarded. New IIB chief executive Barbara Bradshaw will not be judged on whether this happens or not, she will be judged on what type of deal she can negotiate. It is, of course, an emotive issue with the sudden passing of former IIB boss Andrew Paddick, who fought so fiercely to retain the organisation’s independence. But that should not distract from the reality that independence may have not been the best path for the organisation or its members to follow.
If you accept that the Biba does not need the IIB as it is larger, maintains a greater profile and punches above its weight in its presence and finances, then what does the IIB bring to the table in any merger negotiations aside from its limited number of members? A quick market analysis also tells you that the type of small broker that the IIB commands is gradually disappearing at the hands of consolidators which are often Biba members.
Bradshaw could probably continue with the status quo for a period of time but, if she is to be realistic, then there would be an acceptance that IIB members would be better served in the wider converging market as part of a stronger, united broker voice within Biba. Bradshaw may perhaps push for a merger based on a stance that a new broker organisation is born out of the two, but Biba is never going to follow that route. Perhaps the best option the IIB can hope for is to become a division of Biba that champions the ambitions of smaller brokers.
As insurers prepare for the first round of the reporting season the signs are already looking ominous. AIG has reported sub-prime investment losses of over $5bn and Swiss Re and XL Capital Assurance have both too waved flags high in the air indicating that there is a major sub-prime problem. The extent to which this global economic problem impacts on the rest of the insurer pack will play out over the coming weeks. But if it is as bad as the indicators suggest, it may be just enough to catapult the industry into a hardening market. IT