Elliot Lane crosses the 'battle lines' to discover what's really happening with the acquisitive broker

With Scotland's historic win over England last weekend (which as an Englishman is galling to type), it now seems an opportune time to reflect on the long term strategy of Royal Bank of Scotland Insurance (RBSI).

If the analysts were right then the bank's results this week for the insurance division should show healthy growth, and will reflect the impact of the NIG acquisition for the first time.

It should also indicate the worth of brokers to the organisation versus the red phone philosophy.

This leads on to the latest rumours that RBSI will eventually head into battle with Norwich Union (NU) and AXA for the rights to the Towergate empire.

Calling it a battle is a little rich.

It's not much of a fight when the foe holds all the armoury and the war chest - in this case RBS, the bank - is the benefactor of Towergate and Peter Cullum et al.

"They have created a monster," was the phrase used by the managing director of a leading independent regional broker recently when describing the NU and AXA relationship with Towergate.

For months the open talk from bellies on the bar in and around Leadenhall Street has been that NU and AXA have signed an agreement with Peter Cullum for exclusive rights to bid for Towergate, if and when he decides to sell.

Madness? Maybe. Especially if Cullum and his team do achieve £2bn by the end of 2006 as he predicts.

But the Towergate dream team and its consolidating machine has inherited an Achilles heel - Fusion.

Brokers up and down the country are planning a counter-attack against Towergate after being, in their eyes, cut out of the loop and watching prime business either passed to Norwich Union or Fusion/Towergate.

The non-compete clauses are biting hard and could leave Towergate's long-term strategy for Fusion in tatters.

Brokers who have appreciated the excellent service Fusion has given them through the years may walk away for good.

With the purse strings held by RBS, the wonderful idea of a fight between NU and AXA will be academic.

And the leading lights in both those insurers may find themselves wandering Ozymandias-like through a desert of fallen idols and ideas.

It is ironic that Yorkshire-based brokers are beginning the war against Towergate.

The most ferocious Scot, William Wallace, did not make it as far as York. IT