New firm only has eyes for insurance deals

As the number of start-up brokers and underwriting businesses increase, opportunities for wealthy investors rise too. The insurance sector has seen its fair share of third-party investment in recent times, but could a new wave of cash-rich backers be about to pounce on the next breed on insurance industry entrepreneurs?

The new firm, Alpine Risk Services, has set out to do exactly just that. With the backing of Alcuin Capital Partners, it has a venture capital firm that is new to the insurance industry, but keen to take a slice of what many others have profited from.

It's strategy is simple. It is targeting the cream of the crop amongst broking and underwriting businesses in the UK and across Europe, with potential investment of up to £10m available for growth opportunities, either organically or by acquisition. The firm is also keen to back management buy-outs and buy-ins, with the return of a majority or minority stake in the business. It is a real life Dragons Den for insurance.

But as everyone knows, the dragons are no easy push over’s. Alpine is only interested in committed and ambitious businesses, and will not want to take on anything that poses a risk, particularly in the current economic climate.

The man behind the venture, Francis de Zulueta, says insurance has become attractive to investors despite what is happening in other sectors. “For investors it is a renewable income attached to it [insurance sector]. That is quite appealing to capital backers. The insurance industry has not suffered anything like the banking sector. It is one of the few places any where you can set up for a relatively small amount of money. That makes it a particularly good partner for specialist venture capital.”

“There is always risk attached to all business ventures but insurance intermediation tends to have defensive qualities to it and if anything the profile is better in a downturn as risks can increase not decrease and thus so can premiums and commissions.”

Recent MBO’s, including the acquisition of Hastings and Advantage, were backed by private investors. Alpine will quickly find out how much of an appetite there is for their deal.

See news story: New consortium promises to splash out on insurance