Giles sets Ink target of £300m GWP in three years while Oval mulls plan to launch agency
Consolidators Oval and Giles are leading a fightback for managing general agencies (MGAs) after several insurers decided to stop working with them.
Oval is looking to launch an agency and Chris Giles has revealed an ambitious plan to rebrand and extend his MGA, Ink Underwriting. Giles wants the operation to reach gross written premium of £300m in three years.
Jeff Herdman, Oval group managing director, confirmed that the broker had been in discussions with insurers, which market sources suggested included Allianz and Brit.
“Oval is talking, as we always do, with a number of different insurers regarding a number of different projects. We have discussed the possibility of an MGA, but we are far from the stage of implementing any plans.”
Giles spoke to Insurance Times following last week’s revelation that Norwich Union would stop providing capacity to Ink from the end of the year.
He admitted the Ink business, which is made up of an agency specialising in printing presses and major construction risks as well as a general retail MGA, could be confusing.
He said the retail MGA would be rebranded within three months and its development would form a major plank of Giles Insurance Brokers’ strategy in the coming months.
He added that Ink was hiring new underwriters and suggested 40% of Giles’s business could be underwritten by the retail MGA.
“This is a development of our strategy as a consolidator; we are not in the business of trying to gouge high commission levels out of insurers. We want to work with insurers efficiently so we’re taking on their costs and are rewarded for that.”
Like other consolidators, Giles has held crunch talks on commissions with large insurers in recent months. Norwich Union has scaled back its trading with consolidators in favour of independent brokers.
Giles said: “At the time we bought Ink, NU was a shareholder in Giles and provided financial support for us to buy the business on the basis it would pick up some of the capacity and help us develop an MGA strategy for our retail branches.
“Following management changes, NU came to a conclusion that they shouldn’t be backing a consolidator to build an MGA and go and buy other brokers. The net result would be that the smaller broker would be passing their business through Ink, and NU would be paying higher commission levels.”
Giles said he “fully supported” NU’s decision to change its strategy and would continue to work with the insurer on other parts of the business.
He said Ink had already lined up replacement capacity providers from among the UK’s leading insurers, but declined to name them.
Giles added that as a retail MGA, Ink would not compete with its capacity providers for business. He said it would help Giles brokers place business as the market hardened.
NU provided Giles with an interest-free loan to buy Ink in 2007 and originally provided all the capacity on the specialist book.