Should we all congratulate Richard Griffiths and Network Data on a job well done? Richard, well done (I think), for being the first new mortgage and general insurance network to have made it into the 500-1,000 appointed representative bracket. Your results were presented as if you had won a race. But hang on a minute – has the race finished, are the medals being awarded, is it time for the match tea, or has the race only just begun?
If it were, or is, a race what sort of a race is it? A sprint as you would have us believe or is it more complicated with hurdles ahead? Also, is being the ‘biggest’ right now such a comfortable position; is it going to mean you are the biggest, and dare I say most profitable, in five years?
Is being the biggest what it’s all about – do ARs of the biggest feel more secure or make more money than their colleagues in other networks?
Time for an alternative look at Network Data’s proposition. As I recall, Network Data had its agency with Legal & General closed in August. One trade publication reported that this was because of the low quality of business L&G said that Network Data had been submitting. Of course, Richard rejected L&G’s view of Network Data, preferring his own. So who should we believe? And who on earth would want to deal with L&G?
Well we would for one, along with just about every IFA, multi-tied adviser and majority of tied advisers active in the mortgage and protection markets. It is, without doubt, one of the first names that come to you if you think about term assurance providers.
So what has L&G achieved since it was set up in 1836? Well, it is the third largest quoted life assurer in the FTSE100 index by market capitalisation, the biggest investor in the UK stock market. It has won numerous industry award, including Life Insurer of the Year 2004 at the British Insurance Awards, for the fifth successive year. Finally, according to Swiss Re’s Term Health Watch 2004, Legal & General wrote 394,906 individual term assurance policies in 2003, more than any other firm in the UK.
So when L&G, with all its experience and expertise in life insurance and distribution, decided to stop accepting business from Network Data, L&G must have considered its actions carefully as it has effectively cut off Network Data’s significant volume. This is not something it would have done lightly, in fact most distributors are courted by providers.
Richard, I am sure that your outspoken approach will lead to you becoming rich quickly but, without dwelling on the issue of run-off PI cover, I’m not sure what’s going to happen to your ARs as the regulatory pressures start to bite and the quality of the business being written comes home to roost.
Direct Life & Pension Services