Acquisition boosts Primary's premium income by £30m
Primary Group made a flying start to the new year with the acquisition of commercial underwriting agency ATD General. The sale will boost Primary's business by an estimated £30m of premium income.
Primary, the Bermuda-based insurance distribution group, stepped in after four months of talks with Brit came to nothing.
ATD General managing director Tony Docherty said Brit, for whom ATD had been writing nearly all of its business, approached the company in July.
But its offer failed.
Docherty explained: "There were aspects of their financial offer which were not attractive to us. Secondly, we wanted strong commitments vis-à-vis our staff."
Talks with Primary had begun by November and concluded last month.
"They were able to give us the comfort we needed, particularly on the matter of staff," Docherty said.
The deal gave ATD continued independence with access to a stronger capital base.
Its 40 staff would remain in its four UK regional offices in Manchester, Belfast, Leeds and Birmingham.
Primary also has offices in the latter two cities but Docherty said it was "extremely unlikely" there would be office mergers.
Docherty said: "Ideally in three years' time I would like this business to be at least double what it is now and possibly more - £60m, £70m or £80m of premium income. We are unlikely to be able to do that through organic growth."
He wanted to increase premium income without adding to ATD's headcount in the immediate future.
Docherty did not disclose the terms of the sale.
ATD's expansion plans
ATD managing director Tony Docherty said the sale would allow ATD to expand into new areas.
Capacity for 2004 is £35m, an increase of about £5m against last year.
Plans for the future include:
- Motor fleet and motor trade: ATD already has a small motor trade book written for NIG. This could be allocated several million pounds.
- PI and D&O: About £1m could be put towards business focusing on small to medium sized accountants, engineers, architects and similar risks as well as commercial affinity schemes.
- About £0.5m could go towards a marine operation, likely to focus on cargo and goods in transit. One of Docherty's tasks will be to look for a marine underwriter with an established name in the regions.