Biba soothes broker anger over Nationwide deal

Biba has moved to allay brokers’ fears about losing business to an alliance between Nationwide and Kingston-upon-Hull broker The Insurance Partnership.

Nationwide wrote to its commercial mortgage customers in late March, telling them that they had to choose between paying £100 plus VAT to have The Insurance Partnership check their cover, buy Nationwide-approved buildings insurance through the broker or be put on a block policy.

Nationwide said that it was forced to take the action because the ABI had said insurers no longer had to tell lenders about changes to property insurance on mortgaged buildings.

In the letter, seen by Insurance Times, the building society said it needed to check that all its morgageholders’ insurance still met its requirements.

But the move has caused outrage among brokers, who claimed that they could now lose business to The Insurance Partnership, and complained to Biba.

Biba head of compliance and training Steve White said that the trade body had checked the details of the tie-up, and found it was above board.

He added: “We are now talking to the Insurance Partnership, and will then contact brokers about how to allay the fears of their clients who are Nationwide customers.”

But brokers told Insurance Times that the move could lead other banks and building societies to adopt similar measures, and this could lead to them losing more business.

Commercial Direct director Alpen Patel said: “If other major lenders follow suit, then commercial property brokers such as ourselves stand to lose quality and hard-earned business in our droves. This could potentially be a nail in the coffin for the independent broker and change the landscape of property insurance for good.”

Clear Insurance Management chairman Howard Lickens also said other lenders might adopt similar deals.

A Nationwide spokesman said: “We are working with The Insurance Partnership (TIP) to ensure that there are sufficient cover levels in place on all the properties that we are lending against. If the amount of cover is deemed inadequate, borrowers will be given the opportunity to improve their cover levels.

“TIP offers a policy that comes with the right level of cover for our clients. However, this is not compulsory but purely an option. Borrowers will always be able to choose how and with whom they insure themselves as long as there is the agreed level of cover.”