The Scottish broker crests the £300m plateau - a year early.
See also: Giles Distribution Director interview
As any consolidator will tell you these days, it is hard to keep up with Chris Giles.
In fact, given what they call “prevailing economic conditions”, it’s nigh-on impossible.
Since securing half a billion in funding from Charterhouse and RBS in March, the Scottish broker has made a total of 11 acquisitions, dipping its finger into every insurance-related pie it can along the way.
While some acquiring brokers prioritise fit in terms of business line, Giles has gobbled up targets in a location-centred and patchwork fashion, with specialisms across both personal and commercial lines - from construction and PI to bed & breakfast, furniture and most recently, golf.
It also has an accredited Lloyd’s broker, has unveiled plans to ramp up its underwriting function to the tune of 100 expert staff, and has made a slew of senior appointments to help steer the company from upstart Scottish outfit to uber-consolidator/listed-company in-waiting.
“Since securing half a billion in funding from Charterhouse and RBS in March, the Scottish broker has made a total of 11 acquisitions, dipping its finger in every insurance-related pie it can along the way.
It’s quite a change from a year ago, when Towergate was in the ascendant. Having swooped for £75m GWP Aviation broker giant, Hayward, the consolidator-king was in the concluding phase of £276m talks with Open International, and had already turned its gaze towards Harrogate and the Broker Network.
Giles, meanwhile, was sharpening his knives. When in April he bought Wigan-based commercial broker, Kerwin Smith, he lamented that “nobody in Scotland will sell.”
Since then, however, he has bought leading Edinburgh player Carrick Neill & Co, INK underwriting (which has a Glasgow office) and one of the country's leading independents, £20m GWP Crosbie & Jack. The company now has 12 branches in Scotland.
To put it another way, in April last year Giles premium income was a relatively meagre £135m. A year later, this figure had more than doubled. Now, it has crested the £300m mark – a year ahead of expectations.
Plugging the gaps
Further afield, the company has virtually filled all the holes in its geographical armoury, having acquired a trio of Welsh brokers this year and moved into the heartland of its closest competitor, Jelf, in May with the purchase of Gloucestershire based Professional Indemnity Group, while building its presence in the Midlands, the South and the North East.
Then, after buying Wales-based Paul Murphy last month, Mike Jones, a manager at the company said Giles was undertaking “a company-wide expansion plan will see us dramatically increase our presence on the high street.”
“In April last year Giles premium income was a relatively meagre 135m pounds. A year later, this figure had more than doubled.
And in between all this, Norwich Union, doubtless seeing the strategic potential of the business, has both bought and sold its stake – for a tidy profit.
What is interesting is both Giles' future plans, and the scope of its acquisitions. Curiously, £300m GWP is the figure at which Chris Giles said, almost two years ago to the day, that he would float the company.
But with there being no need for any equity injection at this point, it seems unlikely that this move lies in the immediate future.
Instead, with the acquisition runway looking relatively clear, market sources continue to suggest that Giles has to go big in order to avoid the pitfalls of innumerable bit-sized acquisitions that are causing troubles at the broker’s larger competitors.
Reaching the fabled £1bn figure would take a hundred small acquisitions, or three or four big ones. So far, Giles' largest broker buy is the aforementioned Crosbie & Jack.
So could Giles' next play involve a network, the only thing that he is yet to get his hands on?
To find out, read this week’s Insurance Times .
|Carrick Neill, Scotland||34|
|Paul Murphy, Wales||9|
|Hancock GIS, Wales||10|
|PI Group, South West||19|
|Shephard, South East||50||14.4|
|David Moore, Wales||N/A|
|Sutton Barnard, South||31||5|
|Midland RM, Midlands||12|
|Elliot Garden, North East||45|
|DS Howel, Wales||19||6|
|Robinson Leslie, North West||26||8|
|Hedges & Rose, Wales||24||8|
|Crosbie & Jack, Scotland||60||20|
|INK Underwriting, SE/Sc||60||25|
|Kerwin Smith, North West|