Chris Giles heads an acquisitive Scottish broker that is having a considerable impact on the English market. He explains his strategy to Andrew Holt
Not since William Wallace, has a Scot made such impressive inroads into England. Chris Giles, the group chief officer of Giles Insurance Brokers (GIB), has made his mark in England after making acquisitions up and down the country and even planting a presence in Wales.
GIB jumped 23 places from the Insurance Times top 50 last year, to 25 this year, as a result of an aggressive acquisition strategy. In the past 10 months the company has made 10 acquisitions including Ink Underwriting, which added an instant £25m to its Gross Written Premium (GWP).
Chris Giles is proud to note that he remains Scotland’s biggest independent regional broker, where 35% of its business derives. The rest comes from his broker bases in England. GIB is headquartered in Glasgow but operates through a national network of 17 branches. Giles has Derek Gardner, managing director at GIB, to thank for assessing the right acquisition targets. But he also commends colleagues Mark Quinn and Howard Pearson, another managing director for contributing to GIB’s business plans.
“We want to be represented in all areas of the UK,” Giles says in a determined tone, which one would expect from an entrepreneur whose company controls some £200m GWP.
GIB was involved in a capital raising exercise where it secured £100m from backers Gresham. The private equity firm has agreed to make £100m available for the group, over three times the pre-agreed amount of £30m.
Giles says: “We think this will give us much greater opportunities for acquisitions. With that money we hope to make 10 acquisitions over the next year or two. We want to go to the stock market with a premium income of between £250m and £300m, it will take us two years to get there,” Giles says.
He adds: “We will want to go to the main market, not AIM, because we believe the benefits are greater there. It is unlikely that we will make a £50m or £60m acquisition. Our model is all about integration.
“We expect companies to take on our systems and our brandings. Although this might make it more difficult to make acquisitions, it is the right way to move forward.”
Giles adds that he will not reduce his one third shareholding in the company, although his investor partners may opt to review their position at a later date.
But it has been the reality of the market which has forced GIB to focus on acquisitions in England and Wales after being snubbed by brokers in Scotland.
“We are trying to make acquisitions in Scotland, but nobody will sell,” admits Giles.
This contrasts to England where he said there was a healthy pipeline of acquisitions. For example, the takeover of commercial fleet and courier broker Kerwin Smith in April, brought GIB’s premium income to £135m and add weight to the broker’s presence in the North.
Giles has a clear message to express about his acquisition strategy, and it comes down simply to independence. “Given our commitment to remain independent we believe that brokers will want to align themselves with an independent broker,” Giles says.
“We expect companies to take on our systems and our brandings, and although this might make it more difficult to make acquisitions, it is the right way to move forward
“Our strategy is to continue to build our regional network and to take a leading role in the consolidation of the fragmented commercial insurance market.
“We expect companies to take on our systems and our brandings, and although this might make it more difficult to make acquisitions, it is the right way to move forward.”
And what about the much talked about AXA purchases? “Smart & Cook has gone to AXA and that will create space for us,” says Giles.
This independence focus has spread across the country. It has seen GIB open a Manchester base in September last year, and bridge the gap into Yorkshire in November by acquiring two Yorkshire brokers – Richmond Insurance Brokers and Calvert Glover – both based in Bradford. And a new office was opened in Cardiff in March.
The Wales office alone aims to generate £1m GWP in the first year, and is the hub of the company’s motor trade business for south west England and South Wales.
For a man with such Scottish connection Giles was in fact born in England and brought up in Scotland. He began his insurance career in Liverpool with a leading broker. Describing himself as a risk taker, he says: “I’m a risk preferring person.”
And he adds: “I love insurance. I love the way the value chain works. I love chasing business as well as winning business. The politics is fascinating.”
GIB is a newly-accredited member of Lloyd’s and Giles says it will be seeking to expand its presence in the London market.
This summer GIB continued its consolidation drive with the acquisition of Ink Underwriting. The purchase of the Essex-based underwriting agency added approximately £25m GWP to the company’s business.
Ink specialises in liability insurance for the printing sector. It is also diversifying into new industry sectors such as general liability insurance for the construction industry.
The acquisition came two months after the purchase of Wigan-based fleet and courier broker Kerwin Smith.
The acquisition of an underwriting agency was always on the cards. “We said we would purchase an underwriting agency and it’s easier to buy an agency rather than set one up.”
There is no doubt that with his impressive purchasing track record, Giles has further acquisition surprises on the cards for the future.
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