Prices to go up, but few are likely to buy brokers after September 2004
The recent flow of broker acquisitions will come to a halt in September, according to one acquisitive broker.
Speaking to Insurance Times at the Biba conference, Smart & Cook managing director Paul Meehan said that in order to ensure its business and those it has acquired are compliant when FSA regulation begins in January 2005, the broker would cease to make acquisitions between September and March 2005.
Some other consolidators agreed the pace of acquisitions would slow towards the end of 2004 as FSA regulation approaches. One said that as a result of both timing and the emergence of national brokers looking for regional acquisitions, prices paid for brokers are likely to peak in the coming months.
According to PricewaterhouseCoopers, the average price that insurance brokers who have sold their businesses over the past two years have achieved is 1.6 times turnover.