The head of Marsh Networks spoke to Insurance Times about how market factors were affecting the network
Consolidation is a double-edged sword for Marsh Networks, according to its head David Hopwood.
Hopwood told Insurance Times that Marsh Networks will undoubtedly lose brokers to the consolidators, but he sees it as an opportunity too.
“What we win with one hand we’ll lose with the other,” he said. “We are seeing the strongest acquisition market for many years. Activity is relentless.”
Investors see the broking market as a good option for returns, helped by the aging profile of the owners of some of the broker businesses, he said.
This, combined with increasing challenges in doing business, are making it harder for small independent brokers and start-ups, Hopwood said.
Marsh Networks consists of:
Bluefin Network, Purple Partnership, Marsh pro broker;
270 member brokers;
“Like all things, consolidation is a threat and an opportunity. We’re not interested in buying brokers,” Hopwood said.
Marsh Networks does however provide support for network members seeking to buy other brokers. This can range from help with compliance to IT assistance.
It also helps on the funding side. One challenge for smaller businesses is getting access to finance, with high street banks often requiring evidence of personal and business assets when a broker’s main value is actually in its book of business.
Marsh has worked with a bank to help them better understand this value, thereby enabling funding deals to go through, several recently, Hopwood said.
In terms of competition, things have changed markedly over the last 18 months to two years. “We’re not sure what’s going to come out of Broker Network’s acquisition of Compass,” Hopwood said, adding that he was yet to see an impact on Marsh’s broker business.
The recently closed JLT-Marsh merger hasn’t directly affected the Networks yet, but it does bring brokers access to a new range of specialisms, he added.
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