The low uptake of the network is a symptom of broker bravery, says Andy Cook

So farewell Network Extra. After just four months, Camberford Law has shelved its original plan to run an independent broker network and the project's high profile managing director and former Groupama boss, Lloyd Hanks, has left. Instead Network Extra will be subsumed into Camberford Law.

So what went wrong? According to Camberford Law chief executive Richard Sheikh, brokers were unwilling to commit to placing 100% of their business through a network. And that's despite Sheikh's ability to get the backing of at least ten underwriters to support everything a small business would need - bar commercial vehicle insurance.

It would, in all probability, be unfair to blame the model, which allowed brokers to join the network for £1,000 and then pay £350 per quarter for placing all their business through the virtual insurer.

That said, the fact that markets are softening more quickly than many expected means that brokers are not seeking the security of a wholesaler that is as well connected as Camberford Law.

The failure of Network Extra to take off in the way that Sheikh would have liked is more a symptom of the impact of regulatory compliance. In 2003, when Sheikh was dreaming up the model, it seemed that brokers would have three options in the face of regulation. Brokers would either tackle compliance themselves or let others take up the slack by selling up or joining a network.

What we have misjudged is the appetite of smaller brokers to take on regulation themselves. There has not been a flood of small or medium-sized brokers who want to sell up.

The admirable attitude of many is: let's give it a go. If it all looks too difficult or too expensive post-regulation then we could see more brokers come on to the market,but this again will be more of a trickle than a deluge.

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