Networks deny model is in decline

Networks have taken up their fair share of insurance press headlines over recent months. Broker Network and Aviva announced the end of their relationship. Nick Houghton has stepped down as managing director at the Towergate-owned network. And Cobra Network has lost a trio of senior figures, all of whom later turned up in various roles at Ink Insurance subsidiary FSJ.

So it is understandable that questions continue to be asked about the stability of the network market. Are these upheavals a sign that there is trouble brewing for networks?

Not according to Les Brewin, managing director at Purple Partnership, who claimed that there had been “too much reaction” to the news of Aviva and Broker Network parting company.

“Some people in the trade press have used it to suggest that the insurers are starting to walk away from networks,” he said. “That’s not the case.”

He added: “We continue to be approached, we wouldn’t subscribe to the view that insurer interest in networks is waning.”

Mr Brewin accepted that insurers were increasingly taking stock of which networks provided value for money, however he argued: “News of the death of networks is definitely premature.”

Buying clubs or full service

Bernard Mageean, managing director, underwriting and wholesale, at Ink Insurance, was another who acknowledged increased scrutiny from insurers on networks but pointed to the wide discrepancy that exists between some of the offerings available. “Some are just buying clubs and then at the other end of the spectrum you have networks offering a full service,” he stated.

Networks have been in the market for many years yet there are still far more brokers outside than in. Despite this historical reluctance of brokers to join networks, Mr Mageean said he was of the opinion that those who worked hard to improve their offering to both brokers and insurers, should still be capable of adding new members.

Market shake-up

In fact, a shake-up could yet prove to be invigorating. “I think in the long term it will be good for brokers,” he declared.

Meanwhile, Tim Johnson, who has taken on interim responsibility for the MD role at Broker Network, was adamant that recent developments in the network sector have been coincidental.

“There’s no connection between Cobra restructuring and Nick Houghton leaving, they are just a fluke of timing within the market,” he stressed.

Mr Johnson admitted that, having spent the past few weeks meeting with the membership at regional level, he was “pleasantly surprised at just what a non-issue it was”.

No signs of distress

And he quashed any suggestion that the market as a whole was showing signs of distress.

“I think the fact that one in three brokers are in a network already is proof of the pudding,” he said.

“That’s a significant percentage of UK brokers choosing, and that’s an important word, they are choosing to be in networks.”

One such advocate is Jon Newall, principal at Broker Network member Lockyers, who explained why brokers should make this choice. “For my business, it’s invaluable. It lets me get on with the business of broking.”

While he conceded that there were brokers who had already dismissed the network model or had left after a bad experience, he stressed that it still remained the case that the variety of offerings in the market was worth looking at. “There are networks that will work for you,” he argued. “You just need to pick the network based on your own business model.”