Norwich Union estimates that its agency base will shrink by almost a half following broker regulation, according to intermediary business director Ken Wallace.
He said that NU currently has 12,000 agents including many secondary insurance sellers. Of those, he added, there are around 7,000 brokers.
Wallace said: "Our gut feeling is that after regulation we will have around 3,500-4,000 broker agencies."
Wallace said he was keen to find out what plans brokers had for compliance. He is concerned that some NU agents will not be authorised and, consequently, NU could lose customers. "We can't leave decisions until the third quarter," he warned.
Meanwhile regulation experts speaking at NU's regulation roadshow in Edinburgh last Friday warned that the FSA would begin visiting brokers soon to assess their progress in complying with regulation.
Addressing brokers at the third of Norwich Union's series of roadshows, Alastair Noble of PriceWaterhouse-Coopers' regulatory business warned that the FSA had confirmed pre-authorisation visits would be made in the coming months.
He added that the FSA said it would be looking at large brokers, which the regulator defines as having a premium income greater than £1m, and smaller brokers.
He said: "A sample of smaller brokers will be selected based on a particular sector or theme. He added: "You can't count on not being selected."
Noble asked the gathering of over 100 brokers who had completed authoristaion forms. Three raised their hands. Another dozen or so confirmed they had started filling in the forms. The forms have to be completed and sent into the FSA by the beginning of July, otherwise the FSA will not guarantee that it can authorise the firm before regulation day - 14 January 2005.
