Norwich Union to revamp Club 110

Norwich Union is to overhaul Club 110, its answer to consolidators and broker networks, asking some members to leave and inviting others to join as the club enters its second year and breaks the £400m gross written premium mark.

In an interview with Insurance Times, Janice Deakin, corporate trading director at Norwich Union (NU) and John Kennedy, NU’s director of business development, outlined the future of the 236-member group, which they labelled the biggest broker club in the market.

The insurer launched the invitation-only club at the start of this year to reward mid-market brokers that have an £800,000-£5m book of business with it. Members must also have a claims ratio of less than 55% on a three-year average.

The initiative dovetailed with NU’s attempts to drive down consolidator commissions and limit the business it does with underperforming networks.

Kennedy said the insurer was discussing the future of some brokers in the club. “Where brokers have not in our view really followed the club in the last nine to 10 months, there will be some brokers that will not be asked to continue in 2009,” he said.

“The criteria that we set is a serious criteria for us and for the broker because you can get good rewards for being in our club. So if [brokers] don’t meet the criteria, which some of them haven’t, unfortunately they go in to further discussions and that is where we are.”

Kennedy would not specify how many brokers will be asked to leave, but some new brokers will join the club, he said. “That might be because they have become bigger, or we have grown our relationship with them, which means they now fit the criteria or it might be that their performance has improved financially.”

Club 110 offers members access to new schemes, human resources support and compliance advice, as well as financial benefits. Kennedy added: “We think our service is good, but we want it to be better. We will be enhancing what [brokers] get. Which means we can truly say our 110 brokers have a differentiated service and it will be market-leading.”

In September the insurer said it would rather deal with brokers directly than through networks or alliances. This followed tough negotiations with consolidators in an effort to push down commission levels.

Deakin said although the club was not in direct competition with networks, Norwich Union’s model was outperforming its network counterparts.

“We have probably created in less than 12 months the biggest network in the market if you put a direct comparison with other networks. We call it a broker club and that is exactly what it is, but it is bigger than any other of its like in the market.”

A senior network source said Club 110 was competing with networks. The source said: “It is probably good for Norwich Union because it allows them in the short term to keep brokers out of networks.”