Broker alliance seeks ways to turn into profit-making organisation

Unitas is looking at creating an underwriting agency as part of moves to turn the alliance into a profit-making organisation.

The alliance is also looking at supplying an outsourced administration service to members.

The move towards a "for profit" agenda follows a strategic review which rejected the concept of buying members and floating the consolidated company on the stock exchange.

It will be the first time that Unitas, which has 12 independent broker members, has looked to make money.

Until now members of the 10-year old alliance, which has a combined premium of £400m, have benefited from mutual co-operation.

Unitas has not yet revealed how much capacity the underwriting agency will take on, or the type of business it will underwrite. In addition, the alliance has not determined whether it will buy an existing agency or start one from scratch.

Stuart Love, a director of member broker Perkins Slade, said: "It's very much in the planning stage. It could be a niche we want to go for as a new venture, or as a segment of an existing business."

Ron Forrest, incoming Unitas chairman and chairman of Perkins Slade, said: "It will afford us the opportunity to add more value to the Unitas proposition."

He added that it would create a profitable new business for Unitas shareholders without impinging on the valued independence of each member firm.

Forrest said the idea of creating a consolidated entity had been disregarded as "it would take something away from each firm".

He said: "Once you get into centralisation you get into bureaucracy and the big broker syndrome and we just didn't feel it was a step we needed to take."

Profits earned by the underwriting agency will be split among the 12 member companies, who will become equal minority shareholders of the enterprise.

However an issue that the group will have to determine before any new venture takes place is how shares will be split.

Love added: "There might be some brokers who do not put any business through, it's unlikely, but they will still share in the profits."

Unitas members include Perkins Slade, Alec Finch Group and Thomas, Carroll Group.