Insurer plans to continue with niche acquisitions
Royal & SunAlliance (R&SA) plans to make further acquisitions this year following its purchase of motor trade specialist, the Fyfe Group at the beginning of the month.
Director of strategic partnerships at R&SA, Andrew Burke said that the company would continue to purchase niche brokers as bolt-ons. He suggested that the company’s Trading Unit strategy – recently expanded with the opening of four new units in the retail, leisure, manufacturing and public service sectors – would inspire subsequent acquisitions in 2008.
He said: “Our acquisition strategy is not based on control of distribution. It is about control of expertise, and finding a good fit with our existing business. We believe that brokers broke better than we do.”
Before the purchase of Fyfe, R&SA underwrote 40% of its book, worth over £10m in premium terms. This was increased to 100% after the deal. Burke concluded that redundancies at Fyfe were inevitable, but that there were a range of opportunities for existing staff, numbering around 50, to be integrated within the R&SA business.
Burke added:.“There is not a limit to the size of the broker we could buy – we do not have a war chest as such. This is about convincing the relevant people of the business case of the potential deal.”