But managing general agency says a deeper relationship with remaining 350 brokers will help business grow by 10% in three years
UK General has revealed it will reduce the number of commercial brokers it trades with to about 350 by April – but plans to deepen ties with those remaining.
The managing general agency (MGA) announced in May it was cutting the number of agencies it had from 1,500 brokers, but did not give a final figure.
Commercial managing director Mike Keating told Insurance Times it would close agencies with brokers who traded little with the MGA or outside of its risk appetite, for example, if the broker is a recycling waste specialist.
UK General has already closed 100 agencies and written to 200 brokers to tell them that it plans to close its agency with them.
Cancellation of agencies was also based around the data it has on business converstion rates, quotations and volume of enquiries, Keating added.
Keating said the move would allow the MGA to form deeper relationships with brokers that would include access to exclusive facilities and enable the business to grow.
He added that of the brokers they had contacted so far, about 25% had expressed a desire to do more business with the MGA or find out more about what UK General did.
Keating said: “It has been quite enlightening when we speak to brokers how quickly that turns into a positive conversation. We have had a whole host of agency applications from brokers, because we have said we are closing applications.
“Brokers that ask about what we are doing have said to us ‘we didn’t know what you did and we want to work with you’, so immediately that’s not a cancellation but a prospect. Equally we have had people who have left.”
Keating said UK General would not force the remaining brokers to place a particular amount of business through the MGA, but added that talks around targets formed part of the business conversation.
He said: “It is very dangerous to sit with brokers and just agree top line targets. That can sometimes be used as a blunt tool.
“We will work with brokers to talk about what we can achieve together. If a broker has £10m of premium, our challenge is to say: what proportion of that account can we penetrate?
“We are not going to be all things to all men. With the 300-350 brokers, we want to grow their business’.
The MGA plans to grow the business by 10% over the next three years with the pool of brokers it has left.
But Keating said it would not be at the expense of its ‘stable’ loss ratio where the market was not growing.