Daily briefing: Tuesday

Aviva is back on the offensive. Today we revealed that the insurer’s latest plans to woo brokers could see it introduce profit share agreements with personal lines brokers, particularly on motor accounts. But how viable is this in current market conditions?

Aviva’s desire to creep back into the pockets of personal lines brokers has been well documented. Back in 2009 it brought the rates it offered brokers in line with its pricing in the direct market after a broker outcry. It developed its new offering, Personal Best, and linked up with a number of software houses to roll it out to the broker market. It then appointed Sam Hudson as head of personal lines to drive forward its commitment to personal lines. This went a long way to winning back the hearts of personal lines brokers, already suffering with a fall out in capacity, particularly those in the motor market.

Hudson said today that Aviva will not rush into this, and will need time to consider the merits. The staggering losses in the motor insurance market in recent years will be one of the insurer’s prime concerns.

The initiative will only be worthwhile if the motor market can be turned on its head. However the signs of a profitable return to motor are positive, as rates continue to rise and news steps such as the government’s Continuous Insurance Enforcement initiative make an impact. Not forgetting the potential for Jackson’s proposed ban on referral fees, backed heavily by insurers.

However, fears are not only limited to motor. Household rates are soaring, as the AA revealed recently, with buildings cover rising 14% in the 12 months to the end of March to £147 and contents insurance rising by 12% to £76. But concerns will remain about where the home insurance market is heading, as factors such as exaggerated and fraudulent claims, and not forgetting winter claims, which cost insurers £1.4bn between 24 November to 31 December 2010, very much unpredictable.

But as the advantage of profit share agreements is that it gives both parties an interest in maintaining a profitable book of business, it sounds like a no-brainer for an insurer keen to claim back land in this market. Aviva will no doubt pick its broker partners wisely, but the market shouldn’t be surprised to learn more about this soon.

Today also saw new Towergate chairman Alistair Lyons speak for the first time about joining the consolidator’s board and confirmed the search is on for Andy Homer’s successor as chief executive.

And UK General has shown faith in the work Michael Warren has done to turn around the business, by officially installing him as managing director at the managing general agency.

Danny Walkinshaw, digital news editor.

Email: danny.walkinshaw@insurancetimes.co.uk.