Letter of the Month

I have been prompted to write in response to recent reports in the trade media of Towergate's intention to "snatch £100m of SME premium income from rival brokers" by going direct to businesses via a call centre and internet sales.

While the practice of diversifying sales channels both through retail and wholesale is increasingly becoming a popular and often prudent strategy, I was concerned to see that, on the same day, Towergate also announced its appointment to the British Insurance Brokers' Association professional indemnity scheme.

By submitting a proposal for PI cover, brokers will need to disclose certain confidential or market-sensitive details about their businesses, which they would never knowingly disclose to the competition. I am sure that BIBA, its members, and accredited providers would agree that in sourcing any insurance cover, trust and impartiality is paramount.

I would, therefore, welcome clarification on behalf of brokers as to whether this highlights any conflict of interests. Would being privy to confidential broker information give Towergate an advantage in its retail business?

I would also point out to brokers seeking PI insurance that there are other secure and specialist options available to them outside the BIBA PI scheme. An independent specialist PI broker can also provide access to a wider market.

BIBA is clear in its marketing materials that it embraces all aspects of self-regulation and will, I am sure, therefore, address this matter expediently. I have sent a copy of this letter to both BIBA and Towergate, and look forward to receiving their response.

Richard Wynn, Director, Howden UK

To air your views and comments, please write to the editor, Richard Adams, at: Professional Broking, Haymarket House, 28-29 Haymarket, London SW1Y 4RX or email: richard.adams@incisivemedia.com

The writer of the Letter of the Month (as selected by the editor) wins a bottle of Veuve Clicquot Ponsardin Yellow Label Champagne.