Friendly society aims to be Top 5 general insurer
Insurer Liverpool Victoria is to break into the broker market following the acquisition of John O'Roarke's start-up insurance business.
The friendly society this week bought ABC Insurance Solutions, led by former Royal Bank of Scotland Insurance chief operating officer O'Roarke, for an undisclosed sum.
Liverpool Victoria said the move would provide a springboard to develop its general insurance business, Liverpool Victoria Insurance Company.
It is aiming to become a top five insurer within five years. O'Roarke will head up the division.
The financial services giant is to plough £150m into growing its general insurance division. This will see it expand into commercial lines insurance from its traditional base of home and motor cover sold direct or through affinity partnerships.
Five hundred new jobs will be created as a result of the move.
The new, enlarged business will adopt a multi-brand strategy, using the Liverpool Victoria and Frizzell brands initially, as well as launching new brands for different market segments.
It will also create a white-label offering to new and existing major corporate partnerships.
ABC, which expects to open for business mid-2007, will become the broker brand of Liverpool Victoria's general insurance business, selling personal and commercial lines products.
O'Roarke: 'We had venture capital interest'
John O'Roarke this week insisted that the sale of ABC Insurance Solutions to Liverpool Victoria was not because of lack of other investment opportunities.
"We did get venture capital interest, but Liverpool Victoria's proposition was more compelling. It came down to the scale of the ambition; it has a long-term bigger picture," O'Roarke told Insurance Times.
"It also gave us the opportunity to get the existing business rather than take a standing start."
Liverpool Victoria currently has 1.2 million policyholders, including 700,000 motor customers.
Insurance Times reported (News, 24 August) that one of ABC's potential backers had effectively pulled out of investing in the business.
O'Roarke admitted he had fallen out with one equity house that was demanding a very high return on its investment.
But he dismissed suggestions of lack of venture capitalist interest. "It is wide of the mark to say that we didn't get [other offers of] funding."