Vero will no longer sell consumer and construction insurance through Australian brokers after moves to improve the performance of the business segments did not deliver required results for parent company Suncorp.

Suncorp CEO Steve Johnston told a half-year earnings briefing last week that the company continued to review its portfolio following the sale of the Life business and the Capital Smart crash repair operations.

“This has led us to taking the tough decisions to exit intermediated Vero Australian consumer and construction policies, the underwritten travel portfolio and we will no longer offer personal loans in our bank,” he said. “We are also well advanced in our strategic review of the wealth business.”

Consumer and construction has represented only about 11% of the Vero broker portfolio.

Mr Johnston told insuranceNEWS.com.au that the insurance trading ratios for consumer and construction had been sub-optimal for some time and the portfolio was reasonably marginal in the group context.

“We haven’t been able to remediate it so we think the best pathway is to exit,” he said “I want us to be focused on doing less but doing it better.”

The consumer market tends to be focussed on alignment with well-known brands and buying direct, rather than through the intermediated channels, he says.

In a note to brokers Suncorp EGM Commercial Darren O’Connell Mr O’Connell says the decision will allow Vero to focus on its core commercial products: SME packages, fleet and non-fleet motor, property, professional and financial risks, engineering, liability, surety, and underwritten workers’ compensation.

“The decision to no longer offer Vero construction and Vero home, landlord and private motor insurance products follows a review of our business to simplify and strengthen our overall commercial insurance proposition and adjust to current market conditions,” he says.

Nevertheless, some brokers are disappointed by the move, which they say creates a hole in the market, particularly in high-risk regions where there is demand for their services from consumers.

“We do get a lot of inquiries and referrals because of the good work that the broking fraternity has done, particularly in the event of catastrophes and being advocates for the clients,” one broker said.

Another describes the decision as puzzling and disappointing for clients, who even if they are unaware of the Vero brand, have valued purchasing cover through the well-known Suncorp group.

Suncorp says the changes at Vero Australia do not affect the New Zealand business.