The launch of three new broker networks this year is making competition fierce
Never has the competition been fiercer to recruit brokers to networks.
Earlier this month Marsh decided it was time to enter the crowded market and launched its own network, ProBroker.
Only a few weeks earlier, HSBC Insurance Brokers joined the battled by unveiling Labryrinth. Norwich Union also entered the fray in 2009 with Broker Independence Group.
They are up against the well-established big boys – The Willis Commercial Network and Broker Network. Then you’ve got the up and coming networks, Brokerbility and Cobra.
So why is there such a gold rush into broker networks?
Firstly, it’s a good way for the insurer or broker to increase their distribution arm.
Secondly, in these tough economic times, the fees and commissions from networks is an extra revenue earner.
The industry has recognised the gains, hence the creation of networks and fresh recruitment drives for members.
But Is the market too saturated?
Biba chief executive Eric Galbraith says: “There are quite a number starting up and you have to question whether it will be a challenge to attract new members.
“But on the other hand, it creates competition and service, and that’s good for the sector.”
At the moment, it seems that there is just about enough brokers out there for the networks.
But in order to attract new members, networks will need to become more innovative and cunning in what they can offer brokers.
For example, Countrywide aims to upgrade 150 out of its 700 members to Countrywide Plus.
Countrywide – the Towergate-owned sister business – is tailoring Plus towards commercial lines business.
HSBC’s network Labyrinth is aiming for the Holy Grail of all broker networking – bringing in new clients. HSBC says it can offer help with ‘lead generation’.
At a time when clients are not renewing their contracts and many business are simply not there to renew because they’ve gone bust, generating new customers is a delicious prospect for brokers.
Whether HSBC can actually generate any meaningful volume of business, will be the acid test.
Expect many more interesting developments on the broker network front throughout 2009 as the competition hots up for members.