Wednesday, 23 December 2015
TEn Insurance Services Ltd, the network for independent brokers, is delighted to announce that from January 2016 it will begin actively to market its services to small established brokers, in addition to recent or prospective start-ups.
Since 2005, TEn has built an Appointed Representative (AR) network of over 100 brokers, all of whom - bar one - have been start-ups, or re-starts. The one exception was a broker of around £1.75m GWP that demerged into two parts, one of £1.25m joining TEn as an AR and the other (smaller) component of the original business remaining with another network as a Directly Regulated (DR) broker.
TEn believes there to be at least 1,000 (DR) brokers of less than to £2.5m GWP still operating in Great Britain and these will form the target market for TEn Renaissance, although the company expects that initially most interest will come from those between £0.5m and £1.5m GWP. Membership of TEn will require DR brokers to change their regulatory status to that of an AR during a transitional period of up to three years.
Comments TEn Business Development Director James Sharp; “In Australia the AR model for small brokers has been in place for rather longer than here, to the point that AR status is fast becoming the norm for brokers below a certain size. It is not just a question of regulatory burden or, even, economics that makes the argument in favour of AR networks so compelling; curiously there are issues such as independence that work out better within this regime.
According to Jean-Jacques Rousseau, Man is born free but everywhere he is in chains. This is never truer than when applied to the small DR broker in the UK provincial market. Whilst one can only respect their perception of their own independence, it is in reality, all too often, largely illusory. If they are a member of a network, then it is frequently one owned by a large US Private Equity firm or International Broker. If they are not a member of a DR network, then, alas, most composite insurers struggle to justify spending time with them.
Either way, their principals are never as free to spend time developing their clients and business as they would wish; their time and their freedom of choice is limited in ways that a TEn AR is not. We have been looking at the concept of a beneficial small DR network proposition for years and, eventually, have concluded that there isn’t one. For the small broker, distressing as it is to say it, the Aussies have got it right.”
In 2016, TEn aims to add 10 such brokers to its network and to build from there.