A spot of networking

Networks come in different shapes and sizes. There is much current interest in networks, with recent launches by Cobra and TBS, and Willis' expansion.

There are many reasons for joining a network. Some offer the attraction of territorial exclusivity, others access to products and terms not otherwise available.

As insurers continue to consolidate, many brokers find themselves unable to continue to trade with an insurer or have their status downgraded.

In these cases, networks can offer the restoration of the trading facilities or an elevation back to an improved trading status with the insurer. Other advantages of networks include bulk buying for a range of products such as IT, telesales and marketing, and regulatory compliance support.

There is, of course, a price for this service. Brokers may contribute to the costs of the network by direct payment or by a percentage of premium collected from carriers.

Brokers considering joining a network may be concerned about what happens if the network should cease to become viable or cease trading. How would insurance monies be paid to carriers? If brokers are paying insurers direct, they may be better placed than if the network handles the premiums. As for the ongoing availability of agency facilities, if the network allows brokers to retain trading relationships with insurers it could be a comfort.

Brokers considering joining a network should take all this into account before committing.