NU's efforts to end the channel conflict in personal lines is not just about loving brokers
Norwich Union’s moves to reduce the inconsistency in pricing between its direct and intermediated channels will be welcomed by brokers.
Channel conflict, whereby the premium quoted by an insurer through one channel, usually it direct business, is significantly cheaper than that another, usually the intermediated route, has been a bug-bear of many brokers for many years.
Brokers have, quite reasonably complained that insurers (not just NU) which have been claiming to support brokers, have been competing against them with their direct offering. NU is now looking to address this situation. Brokers, it says, should begin to see things change next year.
Where does this sit with NU’s strategy? First, the insurer has been talking a great deal about supporting independent brokers (Its Club 110 initiative has been very much central to this philosophy). Reducing the channel conflict on personal lines business is an important element of this pro-independent broker strategy, not least for its symbolism.
The change also forms part of an overhaul of NU’s personal lines business. This side of the business has been struggling, with the private motor book faring particularly badly. John Kitson, the sales and marking director of NU general insurance business, concedes that the company has not been competitive in personal lines having “lost its way” in 2007.
This year NU has being looking to address its direct personal lines business, reviewing its products and pricing. The company dumped its Pay As You Drive initiative and withdrew from direct involvement with aggregator panels. Next year the focus will be on the broker side of its personal lines business, as it looks to improve the competitiveness of its offering.