Avid’s chief executive says that the transaction is a ’big step’ towards its medium-term growth ambitions
Avid Insurance Services (Avid) has acquired a majority stake in specialist construction MGA Incorporated Insurance Group (IIGL).
The transaction will see London and Leeds-based Avid increase its annual gross written premium (GWP) to approximately £75m.
Following the transaction, IIGL founder Mike Smith will step down as chief executive, although he will still retain a stake in the business, as will other members of the senior leadership team.
Avid chief executive Steve Gibson deemed the deal “very exciting for Avid and a big step forward towards meeting our medium-term growth ambitions. At a stroke, we are adding more diversification by increasing our specialist product lines from eight to 12”.
The acquisition has received regulatory approval, but the consideration is undisclosed.
Smith added: “This is a great deal for Avid and IIGL. Steve and his team have the same relentless focus as we do on underwriting expertise, deep market knowledge and profitable underwriting driven by data analytics.
”In a market where capacity is hard won, I am confident that under Gibson’s leadership, IIGL will accelerate its eight-year trajectory of profitable growth.”
IIGL’s 17-strong team includes underwriting manager Dean Surridge and head of operations Lyndsey Thompson.
The team will all move across as part of the transaction and IIGL will retain its brand and office. Surridge and Thompson will become directors of IIGL and sit on the wider Avid operational board.
Gibson continued: “IIGL is a highly complementary business for our existing commercial portfolio. They have A-rated insurer support and share our underwriting-led business philosophy. They have built their success in construction by underwriting every risk themselves, which has underpinned their outstanding performance during the current hard market.”
Speaking about Smith, Gibson said that he has built “a first-class MGA, which will make a big and positive difference to our market presence and I am especially pleased he is retaining an interest in Avid.
“Looking ahead, we remain open to acquisition opportunities where they make strategic sense for Avid and, after recent successful hires Steve Duxbury and Mike Patchett, we are also keen to attract more specialist underwriters with existing profitable books of business in niche lines, who buy into our underwriting-led business model.”
Meanwhile, Andy Marsh, founder of Beech Tree Private Equity - which invested in Avid in 2019 - added: “This is a bold and exciting move for a top-quality MGA and exactly the kind of transaction we hoped for when we invested in Avid.
”I am confident that all parties will achieve significant value from this acquisition.”