REVEALED: The full details of the shocking culture that gripped Bluefin

The full details of the shocking Bluefin business culture is revealed today in the FCA’s damning report.

Bluefin was fined £4m today following its bad treatment of customers. 

And the 23-page report reveals how customers thought they were dealing with a ‘truly independent’ broker – but instead were kept in the dark by a broker relentlessly focused on placing business with preferred partners, and especially its owner, AXA.

The Final Notice report reveals numerous examples of questionable customer treatment, including one where a customer could have got a policy £45,000 cheaper, only for it to land with AXA.

One communication to brokers said it was ‘plain daft’ to fight for a more competitive quote for customers if it went against using the preferred facilities.

The FCA stresses that there is ‘no criticism’ of AXA, leaving all its fire for Bluefin. 

Bluefin’s AXA first strategy

The story begins in 2011 when Bluefin set an ‘aspirational target’ of generating £25m EBITDA and placing 25% of all Bluefin business with AXA Group, subject to treating customers fairly.

It became known as 25/25 target, according to the FCA notice.

In August 2011 Bluefin head office circulated lists to its branches of all customers coming up for renewal.

Brokers were required to place business with preferred partners where possible – but were not properly told how it would help their customers, the report says.

Added to all of this, brokers were required to offer up all existing renewal SME commercial combined business to AXA - although placement was not mandatory. 

Brokers were reminded that ‘AXA offered an excellent rate of commission that would improve Bluefin’s general income position in what was a difficult time for the insurance industry.’

Bluefin then kept customers in the dark by not disclosing its preferential placement strategy.

Conflicts of interest

Bluefin did have a conflicts of interest policy that should have helped independence - but it was too ‘high level’ to be effective.

Even when it was revised in 2013, brokers given only ‘basic training’ weren’t carrying it out properly.

Frequently, brokers failed to record reasons for placing business and didn’t note anything down at all on conflicts of interest when dealing with customers.

In one example, a broker placed business with AXA instead of another insurer which had said verbally it would do the renewal £45K cheaper.

When quizzed by the FCA, the broker claimed he had to place business that day, so went for AXA.

But when the FCA probed the customer case file, it couldn’t find a clear explanation of why AXA was chosen, why the rival insurer wasn’t asked to quote and why the customer wasn’t advised about it.

Branch brokers under pressure to comply

Bluefin used powerful communications to brokers to drive its AXA first strategy.

Brokers were discouraged from ‘traw(ling)’ the whole market for quotes when they had preferred facilities and it would be ‘plain daft’ to drive down the cost of quotes in the local market by using the preferred facilities as a tool.

Meanwhile, brokers were ‘constantly reminded’ of its commitment to delivering volumes of business to AXA and senior management monitored quotations and conversions for AXA policies.

This all ended up with a chunky amount of business being place with AXA.

The percentage of GWP placed with AXA went from 11.91% in 2010 to 16.19% in 2012 and 14.6% in 2014, the FCA found.

In a particularly damning verdict on the management, the report reveals that the FCA had tried to help Bluefin iron out the issues – but they ‘were slow to react to feedback’.

The report said: “Bluefin’s senior management (several of whom were eligible for individual bonuses linked to volumes of business placed with AXA, subject to there being no detriment to clients), actively encouraged brokers to place with preferred facilities (particularly those underwritten by AXA), rather than searching the market for the best value or most suitable cover for each individual customer.”