Covea Insurance Plans UK Commercial Expansion
Covea Insurance wants to build a strong regional presence where major insurers have exited by attracting new commercial business to its trading centres.
The insurer’s commercial book has grown to £100m from £85m a year ago and it wants to grow this to £170m by 2016.
Commercial lines director Simon Cooter told Insurance Times the biggest long term opportunities would come from investment in the regional business.
Covea opened its 9th regional office in London in December. The centres allow brokers to trade face-to-face with underwriters on commercial combined and liability risks worth between £4,000 and £80,000.
And since last summer the insurer has also accelerated its growth plans with 20 new hires across its three commercial divisions; micro SME, schemes and regional.
Cooter said: Some of our big competitors are pulling back to centralise and save money. I personally believe the tranche should be the other way. The closer you are to the customer the more likely they are going to want to do business with you, because you understand the sector.
Last year RSA joined the list of insurers, including Aviva, Direct Line Group, Zurich and AIG that had shrunk their regional office numbers and made significant job cuts.
If you close a regional office and centralise it into another place, the people who were trading with those brokers are gone, Cooter added. It’s back to square one and new relationships.
In the latest 2013 full year results since the insurer’s three UK businesses, Provident , MMA and Gateway Insurance were merged into Covea Insurance, the company reported a 17% reduction in gross written premium to £386m (£463m: 2012).
Within the group results, commercial lines GWP grew by nearly 10% over its financial year to December 2013 – helped by a renewed focus on the development of the business, the result was still adversely impacted by a deterioration on prior year claims reserves.
However the growth of commercial lines was not enough to offset its shrinking personal lines book. Covea said the reduction was down to the sharp fall in motor rates following the Laspo reforms, and also reflected its pricing discipline in an extremely competitive market.