October
October
At the beginning of October, brokers spoke out about wholesale intermediary Servico, that was asking broker clients to pay £60,000 for a franchise agreement in order to continue to place taxi business.
Servico director Stephen Arnold said: “We've been talking to brokers with high business volumes to see if they are prepared to pay for a facility whereby we provide cover as well as various other back-office functions.”
Servico later said it was reconsidering the scheme.
Later in October, Norwich Union managing director Patrick Snowball announced a massive rationalisation programme.
Speaking at the insurer's inaugural roadshow in Bristol, he said it would slash the number of products it underwrites from 300 to 65 from January. “If we can't be a top five player in whatever we do, then we will withdraw from that market,” he said.
He also hinted that the company would cut the amount of high value commercial business it wrote.
“I've ordered a review of commercial property over £100,000,” Snowball said. “We're bleeding badly and I can see no way over the next year of turning that around. It would take two or three years, but I don't have two or three years.”
In another big move, Axa Insurance announced it was planning a “controlled exit” from the non-motor commercial market in Ireland.
An industry source said it had been badly stung over the past few years, despite having a total commercial book of around £270m in 1998.
The race to develop new internet-based systems for the insurance industry hotted up with the announcement of two competing portals in the same week.
Technology giant Misys unveiled I2i-link, a joint venture with the UK's top six com-
posite insurers that would provide a single portal for all broker distribution of insurance.
The launch came three days after software house Rarrigini & Rosso announced its internet application service provider called 24-7 Broking.
24-7 will be available from January but I2i-link will not be fully operational for four years.
Later in October, it was revealed that insurers were culling thousands of small-time sellers ahead of April's deadline for the enforcement of the GISC's rules.
Axa started by giving 2,500 or its 18,000 agency holders one month's notice and by contacting their clients directly. Other insurers admitted their were examining their agency bases along the same lines.
Under the GISC, insurers either have to take direct responsibility for those selling their products or deal only with GISC-registered intermediaries.
Axa broker development manager Colin Calder said those culled did not sell insurance as their main business and that Axa would not touch brokers and professional intermediaries.
