Auto plan aids brokers

ROYAL INSURANCE is introducing a new service intended to help brokers fight the strong competition they face from direct insurers such as Direct Line and Royal's The Insurance Service, writes Paul Durman.

Direct insurers, operating over the telephone, can offer much cheaper cover by cutting out the middle men and being more choosy about the business they select.

Royal's Auto Shield will allow brokers to demonstrate the benefits their work brings to customers. Royal will individually tailor quotations according to the savings offered by brokers' work.

The main beneficiaries will be the 120 mainly larger firms of brokers who deal with Royal entirely through electronic data transfer. Brokers who use screen-based quotation systems will also be able to use Auto Shield, although their customers will have to complete a proposal form on paper.

Royal is restricting the cover available under Auto Shield - for example, insurance will be restricted to named drivers.

Roy Randall, a Royal spokesman, said: 'The acquisition costs of different (distribution) channels can be reflected. We can reflect any savings that we achieve through the broker.'

The Insurance Service, set up six years ago, was so named to distance it from Royal. This was thought necessary because of the antipathy brokers felt towards direct insurers.