Insurer denies squeezing brokers out of operations
Norwich Union Insurance's direct operations grew by ten times more than its intermediated business in the first six months of 2005, the company has reported.
Against just 2.5% growth in premiums across general insurance, the company reported a 22% growth in net written premiums in its direct operations.
The insurer said it was "accelerating its strategy of moving closer to customers" through the reinforcement of its direct business.
NU Insurance managing director Mark Hodges denied that the growth would be at the expense of brokers.
"There is a natural move in small commoditised [personal lines] business away from intermediaries to brand suppliers," he said.
"On the commercial side, there is an inevitability of the smallest [business] going direct. Technology will play a part and we expect to see more of this. NU will be a part of that."
NU Insurance reported an operating profit of £431m for the first six months of 2005, an increase of 19% on the previous year.
Net written premiums increased by 2.5% to £2.9bn, while the combined ratio improved by one point to 96%.
The company said the results "reflect disciplined underwriting and pricing, resulting in favourable claims experience".
Commercial lines was a strong performer, producing an underwriting result of £88m and a combined ratio of 91%, down from 94% in 2004.
While personal lines produced a profit overall, motor suffered, with the company reporting an underwriting loss of £14m, compared to a £12m loss in the full year 2004.
The loss came despite a 5% increase in personal motor rates in the first six months of the year.
Hodges said the personal lines market "remained competitive".
The company added it had made "excellent" progress on the integration of RAC and that it was confident of making its targeted cost savings of £80m by 2006.
