Insurer's biggest buy is also its most diverse
AXA’s acquisition of the UK’s 15th largest broker, SBJ, gives the French-owned insurer a Lloyd’s presence that it has craved for some time.
The move emphatically signals the broker's intent to stay in a lead position in the battle for distribution, having lost ground in recent months to some of its rivals.
SBJ is expected to sit alongside the insurer's broking arm, Venture Preference, and will focus on the valuable mid corporate sector, targeting bigger businesses.
The offer, which has been unanimously recommended by the Board of SBJ, has been put to the company's shareholders. If it goes through, as is widely expected, the issue of how it is to be integrated into the AXA family will be the key challenge.
AXA said the addition of the business, with a brokerage of over £80m, would expand its SME market offering currently represented by Venture Preference by around £300m in GWP terms, while enhancing the proposition for larger corporate clients. The presence of employee benefits Company, SBJ Benefit Consultants will bring synergies with the group, too.
AXA has moved quickly to tie up this acquisition, and the move is timely with Giles and Jelf being handed significant war chests to acquire large brokers, and Towergate being in the midst of its own refinancing operation.
As a result, the consolidation race is really beginning to hot up. SBJ one was of the last remaining independent brokers of any size and AXA at least appears to have had a clear run in bidding for it.
There being no shortage of capital flowing into the market, the remaining independent brokers - there only being a handful of any size - can expect the phone to start ringing, and probably from more than one interested party.
