But we're in no rush, says chief executive

Insurer Ecclesiastical is buying a 40% stake in specialist broker Lycetts and says it could snap up the rest of the company.

Newcastle-based Lycetts, which has 12 offices in the UK and Ireland, controls gross written premium (GWP) of more than £70m and deals in farms, estates, historic houses, fine art and bloodstock.

Ecclesiastical, which is based in Gloucester and completed the acquisition of South Essex Insurance Brokers, another specialist, early last year, said Lycetts was the “perfect fit” and would remain independent.

Michael Tripp, Ecclesiastical’s group chief executive, told Insurance Times he was in no rush to acquire the remaining 60% of Lycetts. “We are not looking to build an empire of brokers. But to have two specialists that fit with what we do makes business sense.

“We will take one step at a time, get to know each other and then see how things progress. If things go well, then it could go ahead.”

Tripp said he would join the board of Lycetts through a new holding company. Edward Nicholl will remain chairman of Lycetts.

The Ecclesiastical boss ruled out further deals for the “foreseeable future”. He added: “This really was one of those moments where we did not expect something of such a good fit to come along.”

Tripp insisted funds were available and the group was strong, despite its investment portfolio losing £52.5m in 2008. It made a £69.4m profit in 2007.

Ecclesiastical posted a pre-tax loss of £22.5m for last year, a huge drop from its £35.6m profit in 2007. GWP rose 5% to £403.6m, from £386.9m in 2007.

A strong performance in the insurer’s UK and Ireland business led to a £9.1m underwriting profit for 2008, compared with an £11.8m loss in 2007.

But the company said high claims from the London and international business resulted in an overall underwriting loss of £1.9m. Its overall combined ratio was 100.8%, improving slightly from 102.9% in 2007.