Merger and acquisition (M&A) activity will be rampant at the British Insurance Brokers' Association (Biba) conference, which starts today, industry watchers have predicted.

Brokers told Insurance Times that they expected the Manchester conference to be buzzing with gossip on possible sales.

Meanwhile, an expert said M&A activity in the broking industry had come alive again after a slump last year, with a number of buyers and sellers circulating.

IMAS Consultants associate director James Simpson said prices were too high last year, putting off buyers.

However, the market has hardened, making it difficult for smaller brokers to place risks.

"Brokers need to be in bigger blocks to deal with insurers," he said.

"There are people out there being squeezed and they can be acquired for realistic prices."

Simpson said most of the activity surrounded brokers with between £500,000 and £1.5m commission income and those owned by older brokers.

A senior insurance insider said recent regulatory changes had also pushed brokers to go into sales talks.

"Rates haven't risen as dramatically as some people thought and those that thought they'd avoided regulation and were sitting on a gold mine have put their business back on the market," he said.

Simpson said he expected the newly formed Folgate Partnership to be one of the biggest buyers in the coming year.

"No one else is on quite the same scale, though others will look for strategic acquisitions or small opportunistic buys," he said.

Meanwhile, the Folgate Partnership remained tight-lipped over rumours it is in purchase talks with broker Duncan Pocock.

Sources have said the Surrey broker is set to become part of The Folgate Partnership's broker network.

The partnership bought Leeds broker Smithson Mason Group in February and operations director Kenny Maciver said it planned to buy at least 50 more "hub" and "spoke" brokers in the following 18 months.

A broker source said Duncan Pocock was a similar size to Smithson Mason, making it a good fit as a hub broker. Established in 1964, it has a £5m-plus premium income listed in the Insurance Directory 2001.

Duncan Pocock managing director John Marshgreen said he could not confirm or deny the rumour.

"It's a time of consolidation in the broking market [and] we're talking to a lot of people," Marshgreen said.

"We've been approached by several people and we've also looked at acquiring people."

The Folgate Partnership chief executive Andy Homer also refused to comment.