John Jackson says Broker Direct has a strategic market position which must be supported
Andrew Paddick, director-general of the IIB, has come in for fierce - and in my view totally unfair - criticism because the trade body's insurance arm, Broker Direct, has bought up Bolton-based broking firm Greenhalgh & Gregson.
The broker market is contracting rapidly as the full force of excessive regulation bites on the broking fraternity. The situation will be made much worse by Mark Boleat, who has the sinister title of "claims management regulator". He will be seeking to add his hobnail boots to the neck of brokers along with the FSA.
Brokers large, small and in-between are being gobbled up like hens lost in a fox covert. Every week, news filters out of new acquisitions and companies announcing that they are on the look-out for potential purchases.
As last week's Insurance Times revealed, Welsh broker Protectagroup has its cheque book to hand, while Markerstudy's latest acquisition is Birmingham-based broker Insurance Factory.
This is a willing market: plenty of brokers are prepared to sell and there are no shortage of interested potential buyers.
At the top end of the acquisition trail there was Catlin's recent takeover of Wellington in the Lloyd's market, and currently a battle is raging to acquire motorcycle specialist broker Carole Nash. There are plenty more examples that readily spring to mind.
A key point that should not be missed is that while the number of brokers is contracting, the market is not - if anything it is growing - so there is more swill for those left at the trough.
When Broker Direct was launched I was fiercely critical, believing that a broker trade body should not be selling insurance.
In principle I have not changed my mind, but I must admit that Broker Direct has stood the test of time.
Moreover, it cannot sit in splendid isolation of what is going on around it in the market. An ivory tower style of management is not something that can be recommended in today's rapidly changing insurance market.
Paddick is right to seize market opportunities and to take a long-term strategic view of Broker Direct's place in the market.
However, I did raise my eyebrows somewhat at his remark that the purchase was "to have the knowledge at the sharp end, as to how the market is operating". Does this mean Broker Direct has been operating all these years in ignorance as to how the market has been operating? IT
