Brokers will not find it difficult to replace the £500m of premium that R&SA has vowed to cut from the market. It is understood that the vast majority of this premium will be withdrawn from the intermediated personal lines business.

Swinton boss Patrick Smith said that R&SA has all but pulled out of branded houshold business and seems to be following suit on motor business.

He added that Swinton, which was once owned by R&SA, had retained its motor account with R&SA, but many other high street and other brands had not.

"We have no problems finding capacity. Smaller insurers like Fortis, Provident and our owner MMA are filling the gaps," added Smith.

Personal lines rates should increase following R&SA's business cuts, Biba chief executive Mike Williams predicted.

Williams said the £500m worth of business cut by R&SA would be distributed between the numerous other personal lines suppliers.

He said this could prompt some to raise their rates. "It's a buyers' market at the moment but it could lead to increased confidence from some insurers," he said.
Williams said brokers were unlikely to be surprised by R&SA's move.

"There's a trend in this direction, with Zurich also applying the axe to Eagle Star Direct recently," he said.

"R&SA has made no secret of the fact that return on investment in commercial lines has been good but personal lines was a struggle."

He said it was difficult to make a serious profit on personal lines because the large number of providers, including banks and supermarkets, meant there was significant pressure on margins.

But a regional motor broker, who wished to remain nameless, blasted the announcement.

"How can cutting back on brokers help save your business? Over a period of time Royal and SunAlliance has launched new products and policies but then slowly closed them down, pushing the MORE TH>N product. But it is a bloody waste of time.

"At least with Norwich Union's Patrick Snowball he sticks to his word. He says 'if you find a direct quote cheaper than us, we'll match it'. The tank commander is a man of his word.

"But with Duncan Boyle and his past boss Mendelsohn - you don't know where you stand. They are strange animals.

"This doesn't look like an insurer which is stable. It looks more like the slow slide into decline.

"R&SA won't quote for any big risks. You'll get a quote for the small restuarant in the high street but forget anything bigger."



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