Broker shifts into growth mode after flat revenues in 2013
Bluefin is close to announcing two new acquisitions following the two it completed in 2013.
The AXA-owned broking group revealed the planned purchases alongside its 2013 results, which showed flat revenues of £100m, but a 10.1% growth in earnings before interest tax, depreciation and amortisation (EBITDA) to £25m (2012: £22.7m).
Bluefin is also revamping its personal lines book under new divisional head Jon Walker after revenue and profitability declined in 2013.
Bluefin chief financial officer Tim Philip declined to name the two target companies but told Insurance Times they were both “relatively small” and that the broker would announce them “very soon”.
He added that both firms complemented Bluefin’s existing business.
He said: “One is a specialist broker that fits with an existing specialism we have. Another is a small commercial broker that will fit into an existing office we have.”
The two new deals follow specialist care home broker Bonsure, which Bluefin bought in May 2013 and followed this up with the acquisition of Edinburgh-based professional indemnity broker PI Brokers in December.
Philip said that after starting 2013 “with very little momentum” on acquisitions that the momentum was right.
He said: “Paul Roberts coming in as acquisitions director [in December 2013] has certainly helped generate more activity.
“We are not trying to replicate the consolidation of the consolidators but we are keen to make a bit more impact in the acquisition space than we have in the past 12 months and I think we are on track to do so.”
He added that the company would also consider larger deals, “though nowhere near the size of the ones that have been going on in the market recently”.
“While some of the other brokers will battle it out for some of the bigger companies we will stick to our knitting and grow what we have got,” Philip said.
Bluefin’s flat 2013 revenues came as the broker’s commercial division produced “modest growth” in revenue, but the personal lines book shrank.
The 10.1% EBITDA growth was caused by Bluefin shaving £2.7m, or 3.5%, from its cost base.
EBITDA in commercial lines, which makes up 90% of Bluefin’s business, grew by about 15%, while personal lines EBITDA declined by an unspecified amount.
Bluefin chief executive Mike Bruce said the company was now shifting into growth mode after a period of cost-cutting, investment and integration.
The company undertook a number of initiatives in 2013 to improve its offering, which included relaunching its website, setting up a new commercial call centre in Leeds and moving all its operations, except call centre-based personal lines, onto the Acturis IT platform.
Bruce said: “We have done all the hard yards in 2013 and now it is about getting the top line motoring.
“You can’t go through the level and depth of integration we have done without becoming internally focused. That is a natural consequence of doing that. But once you have done your integration we can now put all of our efforts on clients and attention on growing new business.”
Bluefin chairman Stuart Reid added: “Our strategy for the next three or four years in part is growth, and that growth will be, we believe, better than it has been over the preceding three or four years.”
Personal lines overhaul
After declining revenues and profits in personal lines, Bluefin is also overhauling the division under Walker, whose appointment was announced in November last year.
Bruce said: “We need to re-engineer that business away from a direct-to-consumer model that competes with aggregators to one that is much more affinity based and based on non-standard risks.
“It is very much getting that business working on a playing field where we can create some difference and win on because direct motor is a very price-sensitive model.”
Bluefin will also soon start making progress on its planned managing general agency (MGA) division.
Reid said Bluefin would be announcing a name for the new division, as well as its leader, who is currently on gardening leave awaiting to join the firm.
He said: “The MGA division is a key part of our strategy. We are going to run slowly with it, take our time and make sure it is set up correctly.
“While we will take it steady we do hope and believe it will be an extremely important part of Bluefin over the next three to four years.”