Recent collapses spur insurers to examine broker finances
Recent collapses have spurred insurers to beef up checks on the financial health of brokers.
NIG commercial division business development manager David Parker said NIG recently requested the current audited accounts of around 100 of its brokers with gross written premium (GWP) of £500,000 or more.
Failed broker Preston Whiteside had an agency with NIG, but Parker denied the move was a response.
Previously, NIG only requested accounts if it had particular concerns about a broker, but Parker said the initiative could be extended to all brokers.
Zurich, which is believed to have lost around £750,000 in the Ward Evans collapse, has not yet implemented more stringent measures to assess broker solvency, but is "considering reviewing" its terms of credit, a spokeswoman said.
Currently, Zurich considers its brokers to be financially healthy if they pass on premiums regularly, and in full.
Norwich Union (NU), which lost an unknown sum in the Ward Evans collapse, considers adherence to terms of credit as a sign of financial soundness and checks broker accounts annually.
NU intermediary business director Ken Wallace said the insurer has no plans to alter broker risk assessments.
Royal & SunAlliance (R&SA) has no plans to review broker solvency assessments. An spokesman said R&SA considers good credit management a key indicator of financial health. Changes in credit management, directors or address can trigger a review, which can involve a full credit check.