Royal & SunAlliance (R&SA) will offer its farm combined cover through only two schemes from 2003 in a bid to make the business profitable.

R&SA broker business manager Gary Peacock wrote to brokers last week to warn them of the changes.

The insurer's farm business brought in £18.3m gross written premium last year.

Peacock wrote: "This book of business, nationally, has not been profitable for some time and I'm sure you will appreciate that we cannot continue on this basis."

He said R&SA had embarked on a "radical review" of how it handled its farm business.

Renewals that fall due on or after 1 January will not be invited by R&SA.

Instead, brokers will have to place their business through Millennium Farm Scheme in Shropshire, a scheme run by former

R&SA employees, or independent underwriting agency AIUA.

"Administrating and underwriting our business through these two channels will enable us to bring the focus and control required to achieve an acceptable result and to take our farm underwriting strategy forward," Peacock wrote.

He said local R&SA staff would talk to the brokers affected by the change.

An R&SA spokeswoman said the changes would not affect the amount of farm business R&SA was able to write.

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