Norwich Union has acquired its 100th book of broker business in the UK – and is anticipating a steady level of acquisition activity in 2005.
This takes the value of purchases in the past 18 months to £58 million and covers 145,000 customers.
Despite an anticipated deluge of brokers exiting the market, the majority of those selling to Norwich Union are continuing to trade and re-focusing their businesses, according to the company’s head of broker solutions, David Leary “As many as 80 brokers have sold their personal lines book to concentrate resources on developing their commercial business and identifying the most profitable lines,” he says. “Most have chosen to off-load their personal book through economies of scale or because it was either a marginal or loss-making piece of business.”
An unexpected side-effect of the acquisitions has been the amount of repeat business being generated. “Some brokers are conducting a ‘staged exit’, firstly selling their motor book and then following up later with their household book,” says Leary.
Brokers selling their books to exit the market altogether are being influenced by a readiness to retire or the impact of FSA regulation, according to Leary: “It is allowing these brokers to make an orderly exit without leaving orphaned clients.”