First come, first served with M4

Virtual insurers, underwriting agents, MGAs - call them what you will. The majority of the new players filling the gaps in commercial insurance provision for the broker channel seem to fall within this definition. It could be argued that their arrival could not be better timed for the broker refusing

That topic came up in a meeting with Graeme Sutton, sales and marketing director of M4 Underwriting, who distinguish themselves by offering "good old fashioned" access to experienced underwriters to underwrite commercial combined and motor fleets on an individual basis with capacity provided by Allianz.

"M4 focus on the broker as the customer, taking into account the broker's relationship with their client," he explains. "We take great store in the broker's opinion of the management of the risk. Each commercial combined case will be surveyed to support the broker's view."

M4 provide exclusive access by offering terms only to the first broker who provides a presentation. The typical premium range is ?5,000 to ?150,000, although business has been written outside this range. Trade is a pricing factor, but risk selection is very much determined by the client's approach to risk exposure and management. For commercial combined business M4 are looking for manufacturing and warehousing/distribution risks and will consider other property biased risks. Motor fleet will be considered in isolation.

Other M4 personnel will be well known to many of its broker partners. Underwriting director is Mike Watts (ex Prudential/Independent/Fusion), motor fleet manager is Jim McClymont (ex Eagle Star/Zurich), managing director is Don Oakley (ex Independent/RSA/Zurich), and the chairman is Martin Long (former Direct Line MD and founder/CEO of Churchill).

A common denominator among all MGAs is their selectivity. M4 are no exception, with a distribution strategy that will extend to around 150 brokers with clear cut risk parameters. So they are never going to usurp the big composite players, but aim to fill the gap currently opening up in the battle between cheap premiums and service going on elsewhere.

"One of the problems is the urge for some insurers to try to use system driven rating systems for cases where such technology is not suitable. When we talk about 'good old fashioned' service we mean giving brokers what they want. The ability to talk with an expert prepared to listen and willing to discuss the merits of any risk to arrive at the best terms. Brokers are also concerned at some of the silly things that are happening in the market," says Mr Sutton. "Experienced staff are being discarded; local contact is being replaced by call centres located offshore; and some composites are allowing themselves to be undercut by their own MGAs. In the latter case, their capacity is sometimes being used to undermine business they already hold, with the added threat to all brokers' existing business - a threat that wastes brokers' time and adds to costs.

"As prices start to move upwards, brokers will find there will be a shortage of experienced underwriters, and the problem will grow as the market hardens. For our part, M4 has to be selective. Brokers know that the best rapport works with people you know and have worked with for some years. The relationships are already established, but need to be refreshed. Having said that, our door is currently open to any commercial provincial brokers with whom we would be happy to discuss possibilities."