Brokerbility buy is a ‘tremendous opportunity’ says Clear Group boss

Clear Group chief executive Howard Lickens described purchasing Brokerbility Holdings as a “tremendous opportunity”, adding that the buy is “a great step forward” for the independent brokerage.

On 28 September, Clear Group confirmed that it had bought Brokerbility Holdings, which owns broker BHIB, Churchill Insurance Consultants and the Brokerbility Network, as well as its associated technology businesses.

The acquisition marks Clear Group’s largest purchase to date – it will now be handling around £200m in premiums and employing more than 400 staff.

For Lickens, the deal “just felt like a jigsaw piece that fitted straight away” as Clear Group have been members of the Brokerbility network for the past 14 years – the businesses and staff, therefore, have a thorough understanding and knowledge of each other.

Calling the purchase a “no-brainer”, Lickens added: “We’re already running businesses that are well aligned.

”We know and like all the people doing it, so once we knew that we could persuade them that a transaction was possible, it’s just a tremendous opportunity. We’d have kicked ourselves if we hadn’t taken it.

“There’s an awful lot of feeling that these are two businesses that fit.”

The deal further aims to insulate Brokerbility and protect its independent standing within the insurance community.

Lickens explained: “If you look at Brokerbility as a network, over the last two or three years or so, the big consolidators have been basically chopping limbs off here and there and we want to make sure that Brokerbility is a strong, sustainable group, and if we can help, if we can use some of our resources to attract new memberships, if we can provide additional resource to existing members and also, self-interestingly, being able to offer a succession solution if they want it.”

Obvious overlap

This isn’t Lickens’ first rodeo when it comes to making acquisitions among the Brokerbility family – in fact, it is this past experience that helped drive the firm’s latest deal over the line.

In 2017, for example, Clear Group bought MPW Insurance Brokers, based in Maidstone. This was followed by the purchase of Warwickshire-based broker Morrison Insurance Solutions last September – both of these firms are fellow Brokerbility members.

“Those deals went so well that it just seemed to us that there’s an obvious synergy, there’s an obvious overlap in how we run businesses and how Brokerbility members run their businesses,” Lickens told Insurance Times.

‘Old school’ M&A

Despite saying that Clear Group is “fairly selective” about its M&A targets, Lickens did confirm that more growth via acquisitions is on the cards, with another deal currently in due diligence.

In terms of the types of businesses that Lickens would look to buy, he said: “We have a fairly wide appetite.

”We love bolt-ons, we love smallish brokers [which] you can attach to an existing location and whilst they can be quite small sometimes, those we like are relatively simple, [so] assimilating them into the group is great.

”We are absolutely looking for the small ones – it could be businesses as small as five, six, seven, eight people.

”But we’re also looking to expand the group further, so there will be opportunities outside our regions, open up new branches, we will always look at those.

”Is the business distinctive in any way? Is there something they’ve got a real speciality in? That’s obviously great, and are these the sort of people who we think we can work with?”

Lickens added that Clear Group, which is backed by private equity, is looking to grow by 20% to 25% a year - this includes completing between two to four acquisition per annum. However, Lickens warned that “it’s important not just to grow for vanity”.

He continued: “If we have to go a year without doing one, we’ll do that. If we see two or three opportunities simultaneously, we’ll do that too.

”You just have to grasp opportunities when you can and sometimes they take so long to get over the line, sometimes they’re quick.”

Lickens differentiates Clear Group’s acquisition strategy too, explaining that the broker has a very heavy focus on people, values and organisational culture – although the financials of a firm do have to add up, it is these more people-centric metrics that are of prime importance for Lickens.

“We work much more with the grain. It’s a much softer, gentler, long-term approach rather than sudden, enormous change. I’m not knocking other people in the business – that’s maybe what you have to do when you’re trying to grow faster, but we’re looking for a much more gentle, much more consensual way of knitting businesses together,” he said.

“There will come a time with brokers, and whether it’s a Brokerbility member I don’t know, there’ll come a time where the vendors are looking to realise some money, realise and crystallise their position, but if there’s an option within the Brokerbility family from an acquirer who does it in a gentler, more conservative, longer-term way, it’s what we think Brokerbility members and indeed most smaller brokers, it’s what they would prefer.

”We try to differentiate ourselves from other buyers by just doing it differently and treating people differently. It’s a bit old school in truth.

“The biggest signifier of a deal that is going to work is how you get on with the people and what their values are. That, I think, is equally as important as most other things. That is one of the strengths of the Brokerbility group in that we have a pretty good idea of what people’s values are because we were working with them for years.”

Pandemic pause

As with most events this year, the Covid-19 pandemic impacted Clear Group’s purchasing plans.

“We certainly sat on our hands for two or three months because nobody really knew if Covid was going to be very short-term, whether it was going to destroy the economy, or just damage it a little bit. We sat and waited for a little while,” Lickens said.

“Now I think we’ve realised it’s damaging, but we will get through it. It’s damaging but the broking world is so resilient, our business is pretty resilient. If anything, it’s verified that our sector is a good business. It’s not resistant to recession, but it’s fairly resilient, it’s fairly able to cope with it. We’re very fortunate in the way that we’ve been able to get through it.”

Despite the coronavirus hurdle slowing Lickens’ acquisition trajectory, he emphasised that “we’re not done”.

He added: “We’re gradually moving up the ladder and we’re very much looking for other opportunities. Now we’ve got nine trading branches, nine locations we can grow from. So, nine locations for acquiring, for recruiting and for generally looking for ways to expand.”