Bank to offer propositions for health, motor fleet and property insurance
Lloyds TSB is to develop a broking operation in the next stage of its strategy to build its presence in the SME insurance market.
The bank, which currently offers a general liability product for SMEs, will expand its product portfolio in the coming months. This will include devel-oping propositions for the health, motor fleet and commercial property insurance markets, Insurance Times has learned.
Lloyds TSB has recently started to arrange professional indemnity cover for its solicitor customers, as part of the plans to widen its product range. Other “trade specific opportunities” have been identified.
Managing director of Lloyds TSB Insurance Phil Loney said the bank would be looking to capitalise on uncertainties customers have about brokers’ independence, in the light of recent acquisitions by insurance companies.
He said: “If anyone takes their eye off the ball we will take advantage of that. Some brokers are quite sleepy; they may a have close relationship with new customers but they forget the old ones.”
Loney would not comment on whether Lloyds TSB would use a single insurer to underwrite each of the new products or use a panel arrangement.
He said: “We will offer different services to different customer segments. Small start-ups may get simple insurer products and for larger companies we may offer broking services across a range of different products.”
Loney stressed that the bank’s current relationship with AXA, which underwrites its current SME insurance offering, would not be diminished.
He also insisted that Lloyds TSB would not begin underwriting SME business, as it does with some of its personal lines business.
He said Lloyds TSB’s 800,000 commercial banking customers presented “significant opportunities” for the cross-selling of insurance products.
Asked how Lloyds TSB would succeed in the commercial insurance sector where other banks have struggled, Loney responded: “Most banks have not been focused on it, but we have been focused on the personal lines market place and see similar opportunities in the SME space. We have the trust of customers.”
The first half of the year saw Lloyds TSB’s SME insurance sales grow 12% year on year, according to figures published this week. Overall,the division reported a 10% increase in new business gross written premiums in the six months to 30 June 2007.
But the impact of the January windstorm and the June flooding saw pre-tax profit fall £55m to £59m. The cost of claims from the June floods was £45m with the July flooding predicted to be “similar”.
The bank said it would be begin to implement the next stage of its insurance strategy having “largely completed” the strategy announced in 2003.
This will see it bring administration activity for its broker business in house, starting with its home panel in Bourne-mouth. It will also begin developing its service offerings based around its customer segmentation, and placing more of its branded products on aggregators.
Developing its scale in the SME sector was another goal in its new three-year strategy, it said.
