Battle of the networks set to intensify

Chris Blackham pledged last month to make his network, Layton Blackham Business Solutions, the largest broker network within three years. However, achieving his bold claim is looking harder by the day, as Jelf launched the Purple Partnership network - led by Bob Parkins, who has plenty of experience from his days at Westinsure - then Towergate announced a £95m bid to acquire the Broker Network, which has majority shareholder approval already. This is a dramatic shift in Towergate's strategy and follows its £275m purchase of Open GI, which controls the Countrywide network.

The challenge in paying such a large price for a network is that the brokers are independent; they will always have the option of leaving. There is hard work ahead to persuade brokers that are part of networks, which are ultimately controlled by significantly larger groups, that their independence and futures are secure. After all, the reason for a broker joining a network is often to enhance its independent status by leveraging larger commissions from insurers and gaining greater access to the market for clients. Can a network flourish in a group where there is such a great emphasis on acquiring firms? Perhaps the brokers are indifferent, as both BN's Grant Ellis and Steve Burrows at Cobra, have both bought member firms.

It is a legitimate question to ask if Towergate will dilute the ethos of the BN. Only time will tell if it will happen, but it would seem foolish to change a successful model and one can speculate reasonably that Ellis would have secured certain agreements for his broker base. However, the full detail of the deal will not emerge for some time as Christmas will disrupt the consultation of shareholders.

Towergate is seeking possible further network acquisitions and this will make Blackham's, and by association Axa's, network ambition even harder to achieve. That is, of course, unless Blackham decides the best way to become the market leader is to buy a network.

This year has been one of change that has seen insurers buying commercial brokers, brokers buying software houses and now a major network battle. Who is going to bet on what is going to happen next year?