Brokers with £2m gross premiums targeted
The newly formed Woodstock Insurance Brokers has at least £5m venture capital to spend and is close to signing a deal with its first broker.
Tony Simper, who set up Woodstock with Richard Coleman on 1 March, said they would take advantage of the buyers-market atmosphere in broking at the moment.
"We believe brokers are ready to sell for a variety of reasons and we believe there are books of business with insurers and IFAs that they don't want," he said.
Woodstock has already bought more than 11,000 clients from an unnamed direct insurer.
Simper said this deal provided Woodstock with more than £3m in gross premium income, which they planned to increase to £8.5m by the end of February 2003.
He said Woodstock intended to grow through acquisition and was already in serious talks with five brokers about buying their books of business, with one sale about to be completed.
Woodstock is also due to take at least 1,000 quotes a day from another direct insurer from August onward.
Simper said they planned to buy up to eight books of personal lines business by the end of 2003, spending at least £5m.
He said the typical broker they were looking at had at least £2m in gross premium and about 50 agencies, but he said they would consider larger purchases as well.
"The money is available for the right purchases," Simper said.
Woodstock already has 15 staff, including Marsh's former Southampton commercial manager David Herrmann, and will take on at least 10 more by July.
Simper said they planned to place 80% of their business with five partner insurers, with three insurers already on the panel.
He said Woodstock's profit would come from retention of the business.
"We won't have call centres as such, but account handlers and direct dial telephones, which we're sure will underpin a good renewal rate," he said.
"We want to keep at least 80% of the business after the first year."
Simper has worked as a consultant for the past two years and has 30 years' London Market broking experience.
Coleman joined Eagle Star's graduate recruitment programme and has spent the past four years in various roles.