Wales-based company outlines acquisition plan of three mid-size brokers
Protectagroup has announced ambitious plans to achieve a ten-fold increase in brokerage – from £7m to £70m – by 2010.
The company’s growth plan requires significant expansion beyond its current base in Wales, and includes the acquistion of at least three brokers with a premium income of £10m-30m.
Speaking to Insurance Times, new chairman (and former Willis commercial division chair) Ian Brice said that the majority of growth would be derived from expanding its commercial lines book, which accounts for a quarter of the company’s total business.
The objective is to increase this to 40% within 12 months, and 50% by 2011, when the company plans to float.
“We aim to grow the business to become a formidable force,” said Brice. “We need to make a quantum leap in our commercial lines business. Personal lines, particularly motor, grows itself.”
Protectagroup chief executive Paul Ragan added: “Here is a new consolidator that can compete with the big players. The commercial market is both lucrative and ripe for targeting, and should provide us with the enhanced income streams necessary to meet with our strong growth plans.”
Ragan said the company would look to capture SME business with a turnover of between £2m to £25m.
If the company achieves its target, it would take its place among the 20 largest brokers in the UK. However, since its acquisition of The Broker Gateway in May 2005, Protectagroup has fallen short of its goal to crack the top 50 broker list by this year.
“Our long term aim is to look further afield across the border once we’ve saturated the market on our doorstep,” Ragan said.
Ragan confirmed that the company was looking at a number of London-based businesses, added that initial growth would be focused south of Sheffield.
Ragan admitted that a “serious” acquisition would have to be achieved within the next six months in order to achieve the proposed flotation.
“We have to have scale,” he said.
Protectagroup has made 11 acquistions to date. It is aiming for a brokerage of £25m by December 2008.