Independent brokers give their reasons for why they are bucking the trend and keeping their independence
Some independent brokers fear losing their local connections and local knowhow if they get taken over by consolidators.
They see their independence and their connections with local clients as key assets that could disappear if they were swallowed up by one of the industry’s broking consolidators.
The news comes as Broker Network today announced the purchase of Weald Insurance Brokers. This continues the current trend of growth by acquisition and follows PIB’s recent buy-out of independent broker Wilby (their 14th acquisition in 21 months) reportedly taking the group up to half a billion pounds in premiums.
But while Wilby chief executive Richard Blackburn said he was excited about the “wider experience and resources” that come with joining PIB, other brokers are less keen to give up their independent status to a consolidator.
Peter Smits, managing director at Ashbourne Insurance, said that he has no issue with independent brokers who decide to sell up to a consolidator, but that doing so means the business loses a “personal touch”.
“From my point of view I don’t think there’s any better service than a provincial regional broker,” says Smits. “There’s no doubt about it that once you become consumed by a larger entity you will lose some of that personal touch because of the efficiencies that are driven by economies of scale of a bigger organisation.
“I’m not ready to be swallowed into some larger organisation. There’s still things that I want to achieve and I think Ashbourne can achieve those things if we want to within our limited sphere. We don’t try to be all things to all men; we know what is our bread and butter and our sweet spots and we major on those. I still think we can fulfil that demand and add value as an independent broker.”
Barry McGoun, owner of BJP Insurance Brokers Limited, agrees with Smits and says his main reason for remaining independent is their desire to act and trade without interference.
He added: “To remain independent you have to be of a size that enables you to employ the best skills available. That’s not just on the direct insurance side, but the compliance accounting and computer systems sides as well. All these are very important in today’s rather complex world. We at BJP have highly qualified people in all these areas as well as highly qualified and competent client facing staff.
“We have no remote masters to satisfy or markets that we must use and therefore are able to place business in the market that gives what we believe to be the best balance of cover and price working closely with the individual requirements of our clients. We believe there is a need for brokers of our type and will continue to remain independent as long as we can.”
And maintaining a broker’s independence is something the larger insurers have also been showing strong support for. Phil Bayles, managing director of Intermediaries at Aviva, said that the insurer “wholeheartedly” supported independent brokers by providing them with a range of tools. These include access to local underwriters for quick decision-making to support with areas like regulation and marketing, and, more recently, succession planning.
He added: “Brokers are entrepreneur led businesses. Most entrepreneurs enjoy running their own businesses without having to deal with a reduction in autonomy and an increase in bureaucracy that being part of a larger organisation often brings.
“Independent brokers believe strongly in the legacy they have created, in protecting the needs of their customers and staff, and they play an important role in their local community.
“We support them wholeheartedly and have long been committed to providing local independent brokers with the support and tools they need to remain independent.”