Alpha Insurance Analysts, soon to begin trading as the third Lloyd’s members’ agent, has poached clients worth £230m in capital from rival firm Hampden.
Ex-CBS Private Capital employees James Sparrow and Emma Royds, now the top two at Alpha, have won over Names who were old clients of CBS – the firm acquired by Hampden last year.
Chief executive of Hampden Private Capital, Nigel Hanbury, revealed Alpha’s capture and expressed disappointment at the action of the new members’ agent.
“I was hoping for a new, fresh members’ agent to enter the market and bring in new Names,” Hanbury said.
However, Alpha chief executive Sparrow said that due to an agreement with the FSA, Alpha could bring in only existing Names for 2008, with the intention to attract new Names in the future.
Along with Royds, now executive director of Alpha, Sparrow ran the research side of CBS and both were directors of CBS’s holding company. They joined Hampden for a brief period following CBS’s takeover.
Hanbury said he accepted that competition was inevitable with a new player in the market. He also downplayed Hampden’s loss of capital, saying that the benefits of the CBS acquisition outweighed the recent loss to Alpha.
Hanbury also revealed that 40 new partnerships, equating to around 70 new clients, have joined Hampden in the last year.
Alpha, which has a total capacity of £248m, will take over full responsibility for placing business on behalf of its new clients from the start of 2008.
Hampden took over CBS Private Capital (CBSPC), the members’ agency branch of CBS Insurance Holdings, in March 2006. At the time, CBSPC provided nearly £700m capital to the Lloyd’s market via 600 members.
The acquisition sparked a Competition Commission inquiry as it meant only two members’ agencies were left in the market – Hampden and Argenta. However, the deal was provisionally cleared in October 2006 and then formally cleared in December 2006.
Hampden currently provides around £2bn capital to the Lloyd’s market through a mixture of individual Names, Namecos – groups of Names – and corporate members. It expects to provide around £1.6bn capital in 2008.