The chief executive of niche insurance operation Pavilion Insurance has revealed how his attempts to buy up brokers' niche books of business have been a frustrating dead end.

Last year Andrew Selby told Insurance Times of his buy-up ambitions, but this week he said a number of business discussions had foundered.

"I have had detailed conversations with six companies in the last year which I considered a good fit, primarily over acquisition of their businesses. They all foundered on valuations."

And he expressed annoyance at how companies are valued. "The industry is obsessed with multiples of commission and not profit. By the time you put back in proper management, you are left with a business that does not value up."

But Selby said all was not lost and he was still looking at possible purchases. "The benefit for people whom we could do a deal with - if they want to take our paper as part consideration - is that they have a second chance of growth.

"Fuelled, not only by our profit growth but by the synergies we could develop. We could provide access to a tax efficient and phased exit on rising performance and proper growth multiples."