Norwich Union (NU) intermediary business director Ken Wallace has defended the decision to close high street broker Hill House Hammond (HHH).

Speaking to Insurance Times, he said customers were more interested in going through direct channels for personal lines business and the high street broker was an out of date model.

Wallace said: "We had an infrastructure of 240 high street branches dealing motor and home. That market is dominated by the big brands so we had to do something about it."

Though Wallace refused to be drawn on figures, he stressed the deal would add underwriting value to NU Direct.

He said: "The reason behind what we did is firstly it increased our underwriting. We have set up the panel arrangement with BDML and we would expect NU Direct to increase its share of the HHH market. The business that NU Direct does not convert will go back into BDML. We think we will get good underwriting returns without any acquisition cost."

Asked what NU's broker partners must think about the deal, Wallace replied: "They should be happy. I have taken a competitor out of the market. I have not had a huge backlash from what we have done. We still have around £1bn of personal lines business through brokers so they are very important to us."