topbrokers_01 final:Lloyds_01 15/8/07 15:48 Page 1 TOP 50 UK BROKERS In association with: timesAN INSURANCE TIMES PUBLICATION | AUGUSTtwo 2007 | £25 Ripe for picking Who are the next brokers to be the chosen ones? IT_AD_FP:Layout 1 9/7/07 12:43 Page 1 FROM GLASSES TO COOLING TOWERS, WE’LL SEE A WAY TO INSURE THEM. Whether it’s pubs or power stations – or just about anything in between – QBE can provide the cover. That’s because our innovative approach and healthy appetite for risk enable us to find solutions to problems in all kinds of areas. Even the ones that leave other insurers powerless. No wonder we’re one of the UK’s leading insurers. Share the success, visit www.QBE.com/uk or email [email protected] IT’S OUR POLICY TO SEE THINGS DIFFERENTLY topbrokers_03 final:IT_12-13 final 16/8/07 09:56 Page 12 Top 50 Brokers | 08.07 timestwo Contents 03 Insurer shows the way The Top 50 UK brokers Oliver Laughton-Scott says only time will A comprehensive table of each compa- tell if AXA’s move into distribution is ny’s performance 07 misguided 56 Consolidation tightens its grip Prosper from the process James Simpson reports that revenue is Organisations that shift to a process- still strong as consolidation impacts the driven structure can expect to reap the lower third of the Top 50, but the top rewards says Terry Richardson 08 tier are losing ground 58 Independence for brokers Andrew Holt explains how Chris Giles heads an acquisitive Scottish broker that is having a considerable impact in the 12 English market Supporting the ‘have nots’ Chief executive Grant Ellis has steered Broker Network to big gains but now he’s on the acquisition trail. Andrew Holt 14 reports All the right moves Peter Winslow’s stellar staff continues to make BGL’s divisions very hot reports 17 Andrew Holt Listings A comprehensive list of profiles of the 22 companies in the Top 50 The fear of change On the up? Andrew Holt reports on the true state of Caroline Jordan explains why the top firms lost the broker market, after an in-depth income while many smaller broking groups in 53 study reveals brokers’ hopes and fears 20 the Top 50 are reporting strong growth www.insurancetimes.co.uk | Insurancetimes | August 2007 IT_AD_FP:Layout 1 3/8/07 10:04 Page 1 :HFDUU\VRPHZHLJKW LQOHJDOH[SHQVHVLQVXUDQFH .4-8FSFCJHPOTFSWJDFBOETVQQPSU.4-8FSF CJH PO TFSWJDF BOE TVQQPSU 8JUIPWFSZFBSTFYQFSJFODF BOFYUFOTJWFQSPEVDUSBOHFBOEB8JUI PWFS ZFFBST FYQFSJFODF BOFY BOFYUFFOTJWFQSFQSPEVDUSBOHF BOEEBEBXBSEXJOOJOHTFSWJDF ZPVDPVMETBZXBSEXJOOJOH TFSWJDF ZPV DPVME TBZ XXFSFBCJUPGBIFBWZXFJHIUJOUIFMFHBMFYQFOTFTNBSLFU8FFSFBCJUPGBIFBWZXFJHIUJOUIFMFHBBMFYQFOTFTNBSLFU 8FDFSUBJOMZBJNUPMJHIUFOZPVSMPBEXJUIDFSUBJOMZBJNUPMJHIUFOZPVSMPBEXJUI t%FEJDBUFECSPLFSTVQQPSU%FEJDBUFECSPLFSTVQQPSU t8JEFSBOHJOHMFHBMFYQFOTFTQSPEVDUTGPSNPUPSBOEIPNF8JEFSBOHJOHMFHBMFYQFOTFTQSPEVDUTGPSNPUPSBOEIPNF t'VMMBDDJEFOUNBOBHFNFOUTFSWJDF'VMM BDDJEFOUNBOBHFNFOU TFSWJDF t#VTJOFTTBOEMBOEMPSEQSPEVDUTBMTPBWBJMBCMF#VTJOFTT BOEE MBOEMPSEQSPEVDUT BMTPPBWBJMBCMF #VU#VUUIFOFWFSZCSPLFSTIPVMEIBWFBIBSEXPSLJOHUFBNCFIJOEUI UIFO FWFSZCSPLFS TIPVME IBWFBIBSEXPSLJOHUFBN CFIJOOE UIFNFN $BMM4UVBSUPO$BMM4UVBBSUPOPSFNBJMPSFNBJM TUVBSUK!NTMMFDPVLTUVBSUK!NTMMFDPVL **UDPVMENBLFBCJHEJõFSFODFUPZPVSCVTJOFTTUDPVMENBLFBCJHEJõFSFODFUPZPPVSCVTJOFTT .4--FHBM&YQFOTFT-JNJUFEJTBVUIPSJTFEBOESFHVMBUFECZUIF'.4--FHBM&YQFOTFT-JNJUFEJTBVUIPSJTFEBOESFHVMBUFECZUIF'JOBODJBM4FSWJDFT"VUIPSJUZJOBODJBM4FSWJDFT"VUIPSJUZ topbrokers_05 final:IT_12-13 final 16/8/07 09:50 Page 12 Top 50 Brokers | 08.07 timestwo Introduction 05 introduction AndrewHolt here is no doubt that this year’s Insurance Times top 50 broker listings will look dramatically different in 12 months time. The much touted con- Tsolidation within the industry is beginning, finally, to take hold. Many companies have already disap- peared after being swallowed up by the storm of mergers and consolidation. This is only the beginning. Next year all the talk is likely to be about the most consolidation ever in general insurance broking. The question is whether in some cases the consolidation process may be at some cost, with some companies stretching them- selves too far to keep up with the pace. Only time will tell. But this is unlikely to impact on the deep pocket of insurers looking to buy brokers. It is interesting that the total revenue for the top 50 has seen the first real growth since 2002. But international brokers in the top 10 have in aggre- gate lost ground against the rest of the top 50. Much of this is down to the weakness of the dollar, which has helped the mid ranked UK players to gain a larger share of the top 50 income. The top three are unchanged, but have seen a fall in brokerage. Although the biggest drivers in the top 50 have by Insurecom, only 14% of the 100 leading brokers been thorough acquisition, Group Direct, BGL and expressed optimism for the immediate future. And RK Harrison have bucked this trend with excellent over half (57%) believe that the small broker no organic growth. In terms of absolute income longer represents a viable business model. growth, it is unsurprisingly Towergate that come Not surprisingly, over half (59%) are living in fear out top of the pack. Although income growth is not of a takeover from major consolidating brokers. all the story, profitability generates value. That fear is justified, but it is a fear they will have to And the future is a concern for brokers. 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No part of this Reporter: Emma Jones Account executive – display: Dean Harris Telephone: 020 7618 3456 Account executive – display: Yash Puwar publication may be reproduced or transmitted in any form, by any Reporter: Tom Flack Editorial fax: 020 7618 3499 means, electronic or mechanical, including recording, photocopying or Account manager – recruitment & classified: Steve Turner Reporter: Nathan Skinner Production fax: 020 7618 3482 any information storage or retrieval system, without written Feature writer: Anita Anandarajah Sales executive –recruitment: Analisa De Clifford Advertising fax: 020 7618 3400 permission from the publisher. Times Two is Chief sub editor: Terence Verbeek ISDN: 020 7248 3996 published by Newsquest Specialist Media Ltd, 30 Cannon Street, London Art editor: Clayton Crabtree PRODUCTION EC4M 6YJ. ISSN 1466-8149 Sub editor: Scott Skinner Group production manager: Tricia McBride SUBSCRIPTIONS Senior production controller: Gareth Kime Insurance Times, c/o WDIS Ltd, Units 12-13, Cranleigh Gardens Industrial Estate, Southall UB1 2DB Publishing director: Jon McGowan Senior digital workflow controller: Arlene Gocul Tel: 020 8606 7506 Fax: 020 8606 7301 Managing director: Tim Whitehouse www.insurancetimes.co.uk www.insurancetimes.co.uk | August 2007 | Insurancetimes IT_AD_FP:Layout 1 15/8/07 15:27 Page 1 THE AXA “Of course i’m sure I turned the iron off” PLAN. AXA Household Range Home insurance solutions for every customer1 Now you can be sure that there’s an AXA household product available via Full Features include identity theft and business equipment cover, all as standard. 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AXA Exclusive, a sum-insured rated product is aimed specifically at the 1 AXA Ultra is available for high net worth customers 2 For users of CDL, Open GI & SSP ever-growing mid-net worth sector and offers 'all risks' cover. INSURANCE INVESTMENTS PENSIONS HEALTHCARE topbrokers_07 final:IT_12-13 final 15/8/07 15:30 Page 1 Top 50 Brokers | 08.07 timestwo Overview 07 Insurer shows the way Oliver Laughton-Scott says only time will tell if AXA’s move into distribution is misguided t finally happened. An insurer has made combining the businesses into a coherent a bold move buying into broker whole will only be tackled after the Key indicators distribution with a series of significant entrepreneurs are gone and this is when We have looked at the following as our key acquisitions. Talks about the things will get difficult. indicators: consolidators getting together have The real winners of this shareholder value Ibeen ongoing for a number of years. The logic award should be 3i. There is a long