Norwich Union will roll out its promised, flexible, broker-sold motor policy in October, allowing intermediaries to cut out overseas and breakdown cover and cut the price of the product.
Intermediary business director Ken Wallace committed the company to giving brokers the same flexibility that direct customers have after hearing complaints at this year's Biba conference. Brokers from the Midlands northwards claimed few of their customers wanted European cover – sold as standard in broker policies – as they never drove their cars abroad.
NU Direct policies, sold by phone or via the web, have European cover and breakdown assistance as optional extras. Brokers claimed building in this cover to broker-sold policies was forcing the price up, making the direct channel unfairly cheaper.
Wallace agreed to look at giving brokers the same flexibility, and has now confirmed to Insurance Times that the company will implement that change after it announces its new product line-up on October 2. "We will do that in October, although it is not certain we will do it from day one," he said.
The move will be a boost for Biba, which has campaigned on the dual-pricing issue for months. Biba chief executive Mike Williams said: "NU has shown real evidence of being determined to listen to brokers. For [NU chief executive] Patrick Snowball to listen to brokers is a feather in his cap."
Wallace and Snowball met Williams and Biba chairman Simon Bolam last Wednesday to discuss concerns over the CGU/NU merger. Wallace said he made clear how important the broker channel was to NU. "The broker channel is extremely important. It is bigger than all the other channels put together," he said. Pressed, he calculated that a little over 60% of the actual percentage of NU's £5bn turnover came from brokers.
"Of our £5bn, some £3bn comes from intermediaries," confirmed Snowball.
The figures endorse incoming Biba chairman George Dixon's call last week for brokers to use their collective weight to secure better deals and service from insurers.
A joint initiative supported by Insurance Times, Biba and rival trade body the IIB to persuade chief executives to explain dual pricing was blocked by a handful of brokers, who independently complained to the Office of Fair Trading in what both trade bodies and most insurers believe will be a doomed attack.
