Three deals could boost premiums from £550m to £1.1bn
Folgate Partnership is set to rip up its three year-business plan in a series of three deals that would see the virtual insurer handling £1.1bn of premium in two years time.
Folgate Partnership's business plan, initiated last year, was to handle gross premiums of £300m at the end of its third year. Chairman and chief executive Peter Cullum said this has already been revised up to £550m and could be £1.1bn if the three deals come off.
The deals will not be for "hub and spoke" regional brokers which are the basis of the original business plan. Cullum would not be drawn on whether the deals involve the purchase of renewals from existing insurance companies. Although he added that the deals could involve non-UK distribution or reinsurance broking.
Cullum said: "We could do two of the strategic deals next year giving a GWP of £850m versus the £400m already planned".
One market analyst speculated that Folgate is interested in gaining more Lloyd's capacity. The analyst added: "Opportunities for bolting on the capacity that Cullum is talking about are rare and only a few UK distribution streams could add this in the low number of deals being discussed."
He said Heath Lambert, following its unsuccessful attempt to float last year, could be a target. The analyst said Folgate could also be interested in buying a network of financial advisers.
Cullum announced the acquisition of Romford-based Towergate Sharp, which will be the hub for Essex, Towergate Commercial Underwriting and Towergate Stafford Knight's personal accident and travel business. Cullum added that another 12 deals are currently in train.
Cullum unveiled plans to sell a compliance package to brokers which could be in place in just three months. Cullum added for some brokers Folgate would take on compliance and that the broker would become a tied agent.
Homer added that Folgate is dealing with up to a dozen insurance companies. It has well-known deals with AXA and Norwich Union, but also is a Zurich value creator and also has a national deal with Allianz Cornhill. It also deals with PRI, Newline and Creechurch.
Cullum claimed that early adopter insurers had seen return on capital increase by 300% under Folgate distribution.