Source: Insurance Times

Date: 8th June 2006

Warning to brokers as direct sales soar

By Michael Faulkner

Telebroker says SMEs are more willing to buy direct

Premierline chairman and managing director Barrie Wells has revealed sales figures which he claims show the increasing threat to brokers of direct distribution to SMEs.

Wells said 43% of the commercial lines telebroker's policies were now over £1,000 in premium, with the largest policy being more than £9,000. The company's average premium is £1,700.

He argues this shows the companies' increasing willingness to buy commercial lines policies over the internet and telephone Ð 30% of Premierline's sales inquiries are from the internet.

One commercial broker, who wished not to be named, agreed that businesses were becoming more comfortable with using direct channels such as the telephone, but he played down the threat to brokers. He suggested businesses paying over £10,000 would want to use a broker while those paying over £2,500 would think very hard about going direct.

Nick Dumonde, general manger of consultancy Impact Plus, said: Insurers are looking at increasing the premium limits for telephone operations Ð through a broker or direct.

"The challenge for brokers is showing they can add value."

Premierline's 'uncoverted leads' company put on hold

The company create by Premierline to handle leads that it could no convert has been put "on hold" indefinitely.

Regents and General was launched last year to deal with leads that did not fit Premierline's standard model. Unlike Premierline, it used a panel of insurers, rather than the solus agreement with Allianz. At the time Premierline chairman and managing director Barrie Wells aid: "We can get up to 130 inquiries a days that we cannot deal with."

But this week, Wells told Insurance Times that Regents and General had been put on hold. He blamed high staffing levels.