What's really going on at NIG?

It was late in the evening on Wednesday when the phone rang at Insurance Times’s newsdesk.

An unsettled broker’s voice boomed down the phone in complaint.

The broker explained he was set to lose his business development manager from NIG; what’s more, it was part of a wider programme to axe more of those roles.

“Brokers really value their time with these guys. I just don’t understand why NIG are doing it,” he said.

The broker’s tip was correct. It emerged that NIG is proposing to discontinue the role of business development managers.

These are the people who have underwriting skills, but also regularly speak to brokers to smooth relations.

The plans to discontinue the role is part of Direct Line Group’s wider aim to save £100m in cost savings by 2014.

On the commercial side there will be between 50 and 60 redundancies across the group’s commercial lines businesses, which include NIG, Direct Line for Business and Business Insurance Services (BIS), in head office and support function roles.

The decision to end the roles has not been taken lightly by NIG management, however, who are well aware of the company’s history.

NIG: A brief history

NIG used to have a special place in brokers’ hearts as a broker-only insurer.

While other insurers were tearing down their infrastructure last decade to save money, NIG remained a friend to the community broker.

It stood for decent service at the right place. Furthermore, it didn’t branch off into a commercial online as a direct player.

That goodwill was sorely tested in July 2010 when NIG exited personal lines after racking up horrible underwriting losses from the treacherous private motor market.

It took a long time for the dust to settle, but after working hard on e-trading, new products, competitive pricing strategy and a clever rebrand, many brokers once again began to warm to NIG.

New roles created

Management don’t want to rock the boat with brokers with this latest shake-up.

Insurance Times understands that in replacement, there will be a number of new roles, called senior business development managers to work closely with brokers.

It is unclear currently exactly how many roles are being created and how many will be lost.

But NIG’s management believe it can still maintain the same levels of service to brokers with these new positions.

Ultimately, the proof will be in the pudding. If NIG does have shortcomings in service, it will surely play out in complaints from brokers and lead to a deterioration in standing in Insurance Times’s Broker Service Survey next year.

Perhaps NIG can reach the holy grail and improve service while making savings.

Whatever happens, next year’s Insurance Times Broker Service Survey will be interesting reading.