Insurer plans to underwrite up to a fifth of Lark and Bollington business
Groupama’s new chief executive has said the insurer will aim to underwrite as much as a fifth of the business produced by its acquired brokers.
In the first detailed exposition of Groupama’s broker acquisition strategy, François-Xavier Boisseau admitted the purchase of majority stakes in Lark Group and Bollington was to buy access to distribution.
He said profit from the company’s investment in brokers would amount to over 20% of its UK profit within three to four years.
But he strongly denied that the company is turning its own brokers into tied agents.
“The aim is to capture access to market where we can, and diversify our profit stream so as not to rely on the underwriting cycle,” Boisseau said.
“We will be able to grow the account without disturbing the broker model. It is no different to brokers setting up exclusive schemes with insurers.
“It is the brokers making the decision, they still own a significant minority stake.”
He said Groupama underwrites virtually nothing of the business controlled by Lark and Bollington, but he would look to massively increase the amount of business placed with Groupama in the coming years.
“I don’t want it to be 5%, but I also don’t want it to be 45% as that would be too difficult to say the broker was independent – 20% would be reasonable,” he said.
Groupama currently underwrites £0.3m of Lark’s £75m annual premiums and £0.8m of Bollington’s £65m annual premium.
He said Groupama would look to develop exclusive schemes and products with its own brokers.
“We are looking to explore the development of new things with the brokers rather than just trying to convert existing business.”
Groupama is now underwriting motor trade business through Bollington, a specialist in that field, which the insurer has not done before. It is not on an exclusive basis as the broker has other motor trade insurers on its panel.
Boisseau also suggested that Lark might distribute Groupama’s private medical insurance products. Lark does not sell PMI at present.
But Boisseu added that the amount would depend on how much Lark and Bollington chose to place with Groupama, stressing that it would be a commercial decision for the broker to take.
“It depends on the success of the broker and the closeness of the relationship.”
Groupama acquired a majority stakes in Lark Group in August and Bollington in June.
Boisseau, who was formerly managing director of Groupama Insurances, replaced Pierre Lefèvre as chief executive this month, after Lefèvre’s appointment as chief executive of Groupama’s Italian subsidiaries.