News of Churchill's acquisition of Prudential's general insurance business has sent a shiver up the industry's spine.
Privately Allianz Cornhill must be piqued it is no longer a top six UK insurer. According to the most recent figures, due to be published in Insurance Times' forthcoming Top 50 UK General Insurers supplement, Winterthur (which owns Churchill and NIG) was the seventh biggest UK insurer. Add in the Pru's general business and the group leapfrogs Allianz to sit just behind bitter motor rival Direct Line.
The move also deals another blow to brokers. Churchill is known for its call centres and slick, direct service. Domestic and motor policies are largely commodity products for it. There can be no fat in the distribution chain because margins are tight.
With the deal less than a week old, it is not clear exactly how Churchill will handle the Pru's 1.9 million policies. It has a great opportunity to cross-sell motor policies to the Pru's customers and home products to its own motor policyholders. It could also start channelling Pru business through its call centres, making brokers less important.
But what will the customer think? Brokers argue that with one less insurer to choose from, there is less competition and value for money is reduced.
Customers will like Churchill's slick call centres. But there is one key hurdle - integrating the computerised records and the different cultures.
For the sake of the industry's image, this needs to be done quickly and with minimum fuss. Or else we will face more complaints from customers about inefficiency.