Weekly briefing: 24-30 July - Stops and starts

This was the week that the referral debate exploded into life. From being something that the industry has anguished over, ex-justice secretary Jack Straw’s call for their abolition has resulted in unprecedented focus on the issue.

The subsequent debate and Straws targeting of the taking of referral fees by companies will have made uncomfortable reading for many in the industry. But if this furore results in an end to a practice that is helping to push the cost of motor insurance premiums to increasingly unaffordable levels it will be worth the pain.

Moving in packs

There has been a variety of comings and goings in the insurance market this week. The biggest move saw 13 members of staff at Lonmar Global Risks join Gallagher UK. The large team has moved across as part of Lonmar’s sale of a chunk of its liability and affinity portfolio to rival broker Gallagher, which itself has been busy swelling its ranks in recent weeks. It is expected to take a similar number of staff from Towergate Underwriting in a move to boost its rapidly expanding UK retail portfolio.

Yesterday, Insurance Times revealed how four ex-Towergate brokers have switched to Oxygen, which has just added a new Ipswich office to the division serving London, East Anglia and the South East. The four will aid Oxygen’s expansion in those regions. And AXA announced that it has lost a trio of senior claims bosses in its personal lines business, including managing director of claims Tony Peppard. They are apparently off to “pursue other interests”.

Oxygen begins to breathe again

The news coming from Lloyd’s broker Oxygen this week has charted the full cycle from disaster to recovery. Its 2010 results show how deeply the firm was affected by the tragic loss of Leeds-based corporate risks head Sean Hicks and the sudden departure of some of his colleagues from the firm. The resulting loss of business and restructuring of the unit caused the company’s profit to drop by 86.5%. But other news shows that the firm is making a strong recovery and has gone a long way to putting the unfortunate time behind it. The company has continued to recruit staff and build its corporate risks unit since Hicks’s untimely death.

Aviva's spending power

On the subject of expansion, there is much speculation about how Aviva is going to spend its £1bn proceeds from the sale of RAC. Despite fetching a better-than-expected price for the roadside recovery firm, the stock market greeted Aviva’s news with a dismissive shrug. But our subscriber exclusive article suggests a few ways the company could bring investors round.

Solvency II drags on

How long will the implementation of Solvency II drag on for? That’s the questions all insurers are asking after the Council of Europe agreed a proposal that would see the directive come into force from 1 January 2014, exactly one year later than the current timetable. Yet more delay would be a kick in the teeth to insurers, including Lloyds, which today said it would end up costing the market even more.

Get cross-selling

With many smaller brokers facing fierce competition and slipping client retention rates at renewal, more and more brokers are looking to increase cross-selling opportunities to tackle the problem. Insurance Times interviewed some industry experts to get some tips for good cross-selling. The advice varied, but the theme was clear: a lot of brokers have the untapped ability to increase their client retention and premium income by using some simple techniques.

CBG to put up 'for sale' sign?

Finally, all eyes were on listed broker CBG this week after we reported that the Manchester-based business is believed to be eyeing a sale. The broker has a history of making nice acquisitions and has built up a diverse business. But in recent years the growth has stalled as the financial climate took its toll on the business. Now, the likes of Giles and Towergate have been suggested as possible suitors for the business. It may even suit a merger with a similar sized rival.