Biba says Hiscox could suffer after withdrawing from the mid net worth broker channel market.
Hiscox believes the future of mid net worth policies is to be sold on the web. Austyn Tusler, head of art and private client division at Hiscox UK, explained that by removing MNW from its broker channel, the insurer had simply reacted to a changing market dynamic where people were using online purchase rather than the services of a broker or a telephone for mid net worth polices.
But where does this leave brokers advising on mid net worth policies?
Graeme Trudgill, technical corporate affairs executive at Biba, believes that Hiscox has called it too soon. He said: “The reason Hiscox’s direct sales have increased is because they’ve had a big television campaign. MNW consumers do have unique needs and still need the advice of a broker. MNW policies cannot just be simplified.”
He even argued that Hiscox’s decision to withdraw from its MNW broker channel could effect its HNW broker channel.
Trudgill said: “As far as brokers are concerned if one agency is pulling out of the sector it means they are going to have to forge new relationships with companies who offer both MNW and HNW policies and potentially take away HNW custom from Hiscox.”
And comeptition is rife in this lucrative sector. Last year, Norwich Union (NU) looked to take on the HNW giants like Chubb and Hiscox with the launch of its own product. It followed Tradex, an insurer previously known for motor trade, which also announced its intention to launch a HNW product. Insurers have also seen huge potential in the MNW market, with more insurers selling MNW policies through their broker channels in the past five years.
Despite abandoning the MNW market, Hiscox maintains that the broker channel is best for the more complex requirements of HNW polices. Tusler said: “While we expect this trend to continue for mid net worth policies, we are committed to the broker channel with regard to high net worth individuals.”