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When flooding damaged 40,000 homes across the North and Midlands this summer, there was much talk of a boom for local builders carrying out repairs.

The reality is that, while local builders will get plenty of calls for estimates, much of the actual work will be commissioned through insurance companies. But even that isn鈥檛 the full story 鈥� in the world of financial services, the real client is a shadowy figure hidden behind a network of loss adjusters, underwriters and management companies.

鈥淚t鈥檚 a really difficult and complex area,鈥� admits David Williams, claims director at AXA Insurance, which is responsible for 拢300m of construction work a year. 鈥淚t depends on what we want people to do.鈥� AXA鈥檚 staff manage only jobs worth under 拢2,000 or more than 拢100,000. For the stuff in the middle, it relies on loss adjusters or management companies.

For every insurance company, there seems to be a different way of bringing work to the marketplace. Even directly commissioned jobs can be obscured behind an anonymous-sounding joint venture.

Britain鈥檚 largest insurer is Norwich Union, which also underwrites the Endsleigh and Saga brands. It commissions 拢170m of repair work a year on average, although that has nearly doubled this year because of the flooding. In November 2006, it set up a joint venture with contractor Carillion, called Asprea, which now handles all claims from start to finish. So far, 180,000 claims have been sent to Asprea, most for jobs worth less than 拢10,000.

Three-quarters of the work is carried out by 10 directly appointed contractors around the country, a mix of large and small firms. The rest is subcontracted, though all firms used must be approved by Asprea first. It also appoints its own consultants.

Contractors on the framework are not guaranteed a volume of work, but if they impress they are rewarded with wider catchment areas.

Royal & Sun Alliance (R&SA) takes a more traditional route. It spent 拢120m on repairing flood damage in June and July. It works with two firms 鈥� contractor ROK and a company called Homeserve, which provides a repair service to several of the large insurers and to the public. Work is divided up by postcode and, because insurance claims are unpredictable, firms need to have the capacity to cope with sudden deluges.

Nigel Fleet, R&SA鈥檚 service delivery director, says it identified companies with the capacity and reputation it required and invited them to tender. R&SA isn鈥檛 planning to re-tender the work in the near future, but Fleet says suppliers should make themselves known to the procurement team to be in with a chance next time.

Other insurance firms, such as Zurich, rely on loss adjusters to commission all their repair work. These are independent firms

We look for geographical coverage, financial stability and delivery to service level agreements. We are obsessed with quality of delivery

David Williams, Axa

that investigate and settle claims, so you鈥檒l need to approach them directly to win work. Big names include Cunningham Lindsey and GAB Robins.

Insurers might instead use a managed repairs service such as Homeserve, either directly like R&SA, or through loss adjusters. Homeserve, which manages 1.2 million claims a year, has a direct labour force and 200 vans, but also uses subcontractors.

Tracking down the real client is only the first hurdle. Whatever delivery model a firm uses, financial services is a fiercely competitive market and insurers rely heavily on their builders to differentiate them from rivals. Homeserve, for example, turns down three-quarters of the subcontractors that apply for work through their questionnaires.

Almost all insurers favour contractors that can work nationally. AXA鈥檚 Williams says: 鈥淭he three things we look for are geographical coverage, financial stability and the ability to deliver to service level agreements. We are obsessed with the quality of delivery.鈥�

Fleet at R&SA tells a similar story. 鈥淏oth price and speed of delivery are important factors, but good customer service is our top priority. We pride ourselves on providing customers with a high-quality, reliable service, so it鈥檚 very important that every company we use operates in the same efficient way.鈥�

Sue Moore, Rok鈥檚 strategic developments director, says it has key performance indicators, submits performance statistics every month and is subjected to performance reviews. 鈥淭he contracts are very rigorously monitored. Claim handlers want a hassle-free experience with the supplier.鈥�

Craig Brown, procurement manager at Lloyds TSB, says insurers also want to be able to trust contractors not to extend the scope of repairs and raise costs. 鈥淪cope control is paramount for any builder looking to enter this market. We鈥檙e looking for companies that are easy to work with, transparent and reliable.鈥�

He likes contracts with fixed schedules of works so non-technical staff can easily price jobs. Lloyds TSB uses R&SA鈥檚 contractor agreements for smaller jobs, but for anything over 拢15,000, it has a long-standing relationship with a disaster management firm called Ramesys, so any firms interested in subcontracting need to apply there.

So there you go 鈥� clear as mud.