Secondary agents and accounts of less than £40,000 set to be dropped

Norwich Union (NU) is set to cull its smallest agencies.This month the insurer will write to three groups about continuing agencies. These are:

  • Agents who have not placed business with NU in the past 12 months;
  • Agents who are not brokers, such as dentists, vets and lawyers;
  • Brokers with NU accounts of less than £40,000 premium income.
  • The agencies, which represent around 1% of NU's premium income, will be culled unless they can provide NU with a compelling case to keep the agency open. NU intermediary business director Ken Wallace said: "We will not be stopping agencies that can improve their accounts." Where an agency is stopped, personal lines clients will be offered NU's Home and Drivers Club policies, and in commercial lines a local broker will be recommended. The move is part of NU's drive to rationalise its 11,000 agents. The insurer has not reviewed its agency base since 1992. "I expect us to have between 4,000 and 4,500 agencies by this time next year," said Wallace.
  • Royal & SunAlliance (R&SA) is to review its secondary intermediaries over the next couple of months. R&SA FSMA programme director Blyth Morris said that the insurer would be talking to its non-broker agents, such as vets, to find out their intentions for regulation.
  • "By mid-May we will make a decision, and will close the agencies if those that do not wish to become regulated."

    When will brokers apply for FSA?This month will see the greatest number of brokers applying for FSA authorisation, according to research by Norwich Union. The insurer surveyed the intentions of over 1,000 brokers who attended its compliance road shows. It found:

  • 40% will apply in March
  • 17% in April
  • 19% in May
  • 1% June
  • 11% might consider joining a network