1 Answer Network managing director Paul Muir has warned against an increase in direct deals being offered by product providers with hidden agendas.

"We are seeing a few providers approaching brokers and looking to cut a deal direct," said Muir.

"But going direct can be false economy when you look at the value a network brings to a broker’s operation.”

The personal lines network boss said networks offer more to brokers than direct deals with insurers and claims firms.

He said: “Brokers may be tempted by these approaches because they are not realising the depth and breadth of service which networks can deliver and how they can use them to benefit their business.

"The focus is too often on quickly obtained margin rather than sustainable business model. The same can be said of some insurers that, likewise, are not valuing the network’s role in the industry.

Muir said he was impressed by insurers such as Aviva, ABC/LV and Markerstudy that had worked hard with brokers to fill the void left by the departure of firms like NIG from the personal lines market.

Muir continued: “As managing director of a network you might expect me to say that, but I run my own brokerage as well, and have done for 20 plus years, so I know how tempting it can be to strike a deal with a provider that gives a little bit extra in terms of margin or product price.

“The danger is that individual brokers do not have the buying power of networks and the biggest players in the market are demanding commitments on product usage.

"Temporarily struck deals can soon wither away once the provider has got the broker onside, potentially leaving them in a worse situation than using a network.”