Budget Insurance Services and Arnott Century are on the verge of a merger with discussions said to be “at an advanced stage,” writes Alaric Nightingale.

The move would provide Budget with a way into the high street. Currently, Budget is a telebroker operating out of one branch. Arnott Century, itself only recently created after a merger, is an 80-branch operation with a direct unit. It has around 230,000 policyholders, of which about 80% is in the motor sector.

Budget generated £17.5m in fee and commission income last year. Its main business is in the motor sector, where it has 185,000 policyholders. Previously an insurer, Budget switched to being an intermediary in August 1997.

Peter Winslow, chief executive of Budget Insurance Services, said: “Paul Cosh, chairman of Arnott Century, and I share the same vision for the next three to five years.”

The two companies believe a merger would maximise the benefits of different but overlapping distribution channels. Post-merger, they plan to continue expansion through acquisition and organic growth.