Insurer continues review of MGAs
The realignment of managing general agencies continued this week as it emerged that Norwich Union is to pull its capacity from Ink Underwriting, the agency run by Giles Insurance Brokers.
Meanwhile, Great Lakes and Fortis were tipped as the new capacity providers for another managing general agency (MGA), PBS Holdings, part of Primary Group.
Igal Mayer, Norwich Union’s chief executive, has pledged to review all MGA arrangements and withdraw from any that do not make money. In January, Mayer told Insurance Times: “Our vision is simple: you should be able to get the best deal by coming directly to us.”
A spokesman for Norwich Union said: “We will not be providing capacity to Ink beyond the end of 2009, and we are currently running it off until the end of 2009.”
Other major insurers, such as AXA, are reviewing their MGA arrangements.
Norwich Union has also taken a tough stance on commissions for consolidators such as Giles. The insurer is focused on improving its relationships with smaller regional brokers.
Last spring, chief executive Chris Giles unveiled plans to hire 100 underwriters and boost capacity on the underwriting business. It bought Ink in June 2007.
Ink Underwriting specialises in high-risk construction and printing presses.
A Giles spokesman confirmed that Norwich Union had withdrawn capacity from Ink, but added: “Since that time, Ink has expanded the panel of insurers it uses. The business is benefiting from using a wider panel of insurers and continues to grow successfully. Other parts of the Giles business continue to work with Norwich Union.”
Last week, Insurance Times reported that Norwich Union was set to pull its capacity from Primary Group in the autumn. AXA, Primary’s other provider, will pull out from the end of this month.
Primary refused to comment on talks with capacity providers.