Agricultural insurer is going for growth with fresh partner
By Robert Harris
AGRICULTURAL insurance specialist FarmWeb has teamed up with a new partner in a move which it believes will double its market share within four years.
FarmWeb, which trades through a network of independent agricultural brokers and claims to be Britains second most popular farm insurer, has joined forces with NIG, part of the Churchill Group.
FarmWeb started out in 1997 with General Accident as its backer, since when it has grown to become a £20m business. But GA was eventually taken over by Norwich Union, which is placing less emphasis on the agricultural market.
"With NIG, we will continue to develop and deliver a product range tailored specifically for farmers," says FarmWeb chief executive Elaine Pyke. "Core agricultural business is changing. And we have to move with it."
Particular attention is being paid to diversification. David Cheeseman, commercial division assistant manager at NIG, expects to attract £45m of business from farmers by the end of 2005. "We have been looking to expand all markets, including agriculture, for some time. But FarmWeb has been the catalyst."
He believes there are major gains to be made in the sector, despite the dominance of the NFU, which has about a 65% share. Although the partnership has its eyes on some of that market, it sees the remaining 35% as the initial target.
Good service is key to growth, says Mrs Pyke. Underwriting and claims handling staff will be based at a new dedicated centre in Glos.
"The insurance industry has not been delivering the service it should. We have 67 firms with brokers who have to demonstrate the agricultural knowledge to deliver the service we want. They know their farmer customers well, and are keen to expand their business."
But cheaper policies are not on the agenda. Indeed the market is set to harden next year, with some companies quoting a 25% rise in premiums, says Mrs Pyke, FarmWeb itself has pencilled in a 5% increase, taking premiums back to 1998 levels.
Products have been sold too cheaply, she believes. And the cost of re-insurance (used by insurance companies to reduce their risk) has risen sharply, especially after Septembers terrorist attacks on the US. "We are not out to undercut the market – no-one wins in the long run. But we shall be competitive." *
FarmWeb chief executive Elaine Pyke says good service is the key to growth.