Aston Charles continues its impressive run of ‘firsts’ with its inaugural appearance in today’s edition of Insurance Times, widely recognised as the industry’s leading weekly news publication. This features Aston Charles’ Business Consultant, Nigel Law, who shares his experiences of broker acquisitions in the ‘Expert View’ section. In Nigel’s feature, he gives an historic review of the Mergers and Acquisitions across the UK Insurance industry, as well as highlighting his breadth of experience of personally conducting M & A campaigns.
Simon La Thangue at Insurance Times comments, ‘Having such a well known Insurance professional as Nigel sharing his thoughts on M & A activity in the UK broking market certainly adds a lot of weight to the debate. I thank him for his insight and wish Aston Charles every success in this partnership.’
For those who have not yet received their copy of Insurance Times, we have copied the article below...
Mergers and Acquisitions - An Independent View
In the mid 1990's, UK Insurers recognised the need to compete on a global scale to ensure they were not gobbled up by the major European and World players. This precipitated a flurry of Merger & Acquisition activity to build independent UK Insurers that had the scale to compete internationally. Old names like Commercial Union, Sun Alliance, General Accident and Eagle Star disappeared to be replaced by larger post-merger organisations like Royal and Sun Alliance, CGU (temporarily) and larger versions of Zurich (including Eagle Star) and Norwich Union (including CU and GA).
In parallel, the M & A activity accelerated in the broking market with the emergence of Super Provincials diving headlong into major programmes of consolidation. Putting aside any assessment of the adequacy of returns on capital achieved by the various M & A's, what has become increasingly apparent (and this is reflected in a broader societal shift against mega corporate bodies) is that there remains a real desire for the retention of strong and truly independent Insurance Brokers. Regrettably, those independent Brokers will increasingly struggle when in competition with the major consolidators whose resources, and returns from Insurers, will give them a serious competitive edge. However, the truly independent Broker still has a place in our society, as long as it can demonstrate a niche, or a significant USP, allied to its long-standing and well earned reputation in its local market place.
Inevitably, some smaller independent Brokers will themselves need to consider moving to the next level through a rapid growth of their existing business, by the acquisition of Brokers who may be looking to sell because they are approaching retirement, or by acquiring teams of people who have perhaps become a little disaffected with life in the larger corporate organisations. For these acquisitive Brokers, there is often a dearth of knowledge on how to implement an Acquisition Strategy, or where to find suitable selling Brokers. Most often, they will try to do their own thing, bereft of the right advice, making the kind of mistakes that will undermine the financial worth of their acquisition, or damage the faith of both their staff and their clients. Those who do seek advice often get it from a bank, a VC, or from someone with their own vested interest. As such, the advice they receive may not be truly independent and may well not fit with their company ethos.
For the Broker who is facing the difficult decision on whether the time is right to sell, there are a number of perplexing quandaries to resolve. Firstly, is now the right time? Secondly, what price can I realistically expect to get for my business? Thirdly, who do I sell to and how will they treat my loyal staff and clients who I have become so close to over the last 30 years?
Aston Charles is delighted to advise that it can now offer completely independent (of corporate and political influence) advice on the Acquisition Process including Prospecting, Deal Making, Due Diligence, Staff Retention and Integration.
Nigel Law has joined as a Business Consultant and he will be drawing on his own experience of over 40 years in the industry, during which time he has held such esteemed positions as MD of Broker Network Insurance Brokers and most recently, Operations Director of J M Glendinning Insurance Brokers. Nigel has been involved in the acquisition of a number of businesses. His advice comes with the admission that, whilst there have been a lot of successes, there have also been some acquisitions, or negotiations, that have been less successful. Drawing on all of his experiences, he believes he is well placed to give mature, balanced and truly independent value adding advice.
Nigel has been retained by a number of Brokers, including well respected family run firms that already have established acquisition programmes in place, regional independents that are looking to make their first purchase, through to Super Provincials with significant finance in place for ‘mega-acquisitions’.
Whether you are looking to buy or sell, regardless of your company’s size, business make-up, or geographical location, with Nigel’s wide range of contacts in the UK broking community, he is confident that he can assist.