Standard motor insurance was at the core of many provincial brokers' businesses until direct writers, intermediary call centres and shrinking commissions overheated the sector, writes Caroline Jordan .
As premiums dried up, a number of brokers looked to the non-standard motor arena including coaches, minibuses and motorbikes to bump up revenues. But, many have since discovered that this is not for novices.
You need to be big to make it. Smaller intermediaries can generally only expect to place business through a wholesaler, which means less commission.
Coaches, and to a lesser extent minibuses, create potentially massive liabilities. There have been three graphic examples recently.
A crash near Dijon in France left a Scottish teenage girl dead and nine seriously injured - the driver has denied being asleep at the wheel. In the UK, a crash on the M4 near Reading injured
27 Welsh holidaymakers. The vehicle had slammed into a Fiat Punto. In the Lake District, 12 elderly people were hurt when the coach shot down a steep hill and crashed into a garden.
The fact that these accidents happened within weeks each of other has left underwriters and claims managers reeling. But, Norwich Union (NU) is breathing a huge sigh of relief - it pulled out of the market earlier this year. The coach market is now primarily insured at Lloyd's.
Broker Bayliss & Cooke has taken over NU's Coachline scheme, which is being underwritten by Crowe Syndicate 963, now part of Cox.
Bayliss & Cooke managing director David Williams says carriers are placing more emphasis on risk control, particularly the selection and training of drivers, vehicle maintenance and inspection. "The consequences of mechanical failure in a coach can be catastrophic. Operators need to take preventative measures, including daily vehicle inspection," he says.
Williams adds that in the past year premiums have generally risen by at least 20%.
Minibuses, like coaches, are a potentially dangerous category.
Norwich Union (NU) is underwriter for MBP and sells cover though 5,000 intermediaries and covers 30,000 minibuses.
MBP - formerly known as Minibus Plus - is by far the market leader. MBP development director John Pickford says that rates continue to rise, reflecting increasing personal injury claims.
MBP is to run its own seminars on safety for agents to improve risk management. It also works with NU and the RAC on areas such as fleet driver training.
Pickford says MBP is looking to move into coaches, even though this is a sector where others fear to tread. "You need to keep a sense of proportion. Around ten people a day are killed in car crashes, but this does not hit the headlines. Many coach firms are well run and have good safety records. We will look to provide them with cover as others pull out."
Hill House Hammond (HHH) is one of MBP's agents and spokeswoman Clare Benjamin says HHH looks to target specialist minibus niches such as church groups. But, even though these should be relatively low risk, she says premiums are still rising, typically by 25%.
Even higher increases are on the cards for those in riskier areas such as minibuses operated by private hire firms.
"It's better if there is a named driver rather than anyone being able to drive. Underwriters prefer newer vehicles rather than older ones with bench seats," she says.
The motorcycle market is easier than the coach or minibus markets, but is certainly far from being a free-for-all. The cost of dealing with small brokers means that most insurers link up with large specialist intermediaries.
"We want to work in partnership with those who are experts in the market and can provide volume business," says Groupama motor underwriting director Jack Brownhill. He says companies such as Bennetts, MotorCycle Direct and MC Edwards are typical partners.
Brownhill says Groupama's account is profitable because it takes a selective approach. "We don't cover couriers or scooters and we want a good track record."
A healthy specialist intermediary sector means policyholders can still obtain competitive premiums and rivalry between firms is intense, with Carole Nash and Bennetts slugging it out for pole position.
Carole Nash technical director Malcolm Nash says the reduced number of insurers has caused problems, but bikers continue to get off comparatively lightly.
"We were hit hard by the collapse of Independent as we had a lot of business with them. While our policyholders were covered by the Policyholders' Protection Board, there was a 10% shortfall and we had to make this up ourselves," he explains.
Nash says relationships are important, pointing out that while Royal & SunAlliance is not officially in the market, it does underwrite Carole Nash business.
Bennetts bases much of its marketing around risk management initiatives and product development director Simon Jackson says this helps keep premiums down. He says the ideal risk is someone who is prepared to take training and who has plenty of experience.
A few years ago, born-again bikers were flavour of the month with insurers. These are middle-aged men of means who fancy rekindling their passion for bikes.
A black spot in the motorcycle market is scooters. Whether looking for an easier commute into work or trying to emulate cool characters like Jamie Oliver and Liam Gallagher, these are hot right now.
Trendiness apart, Jackson says they have a terrible theft record. "You can have a scooter worth £1,500 and as the insurer knows it is almost certainly going to be stolen, it will quote this as the premium."
He says theft rates of at least 60% are the norm in many urban parts of the UK. Many are simply driven away in the back of an estate car.
Scooter security is improving, however, says NU product development manager Richard Alger and better terms can be offered if it is locked up at night.