What is the significance of Brown & Brown creating a UK operation?
US broking giant Brown & Brown's move to found a London operation, its first outside the US, could be the start of something big.
Though there is a huge distinction between placing US business in the UK, and placing UK business in the UK, spokesmen for the company nonetheless talk in lofty terms about its future. It's UK operation, Decus Insurance Brokers (DIB) will act, it says, as a "traditional UK-based insurance intermediary for the distribution of insurance throughout North America". But there is every chance it could go further.
In the meantime it is focused on developing its US binder business placed in the London market. This was evidenced this week by the defection of a five-strong team from Gallagher. Heading the charge will be new managing director, Melanie Alexander. With over 20 years experience in the London binder market, she is ideally placed to grow the fledgling business.
Though the initial thrust will be to grow the binder book, DIB also has property, casualty and professional liability divisions, which are in the process of being staffed. It will be interesting to see how these grow over the coming months.
The size and scope of the company's US operation suggests that anything is possible. The sixth largest broker on the planet, with revenues approaching a billion dollars (up almost a tenth in the past year) Brown & Brown has a diversified book of business with large wholesale, retail and third-party service arms. It also has a long history of buying brokers, which culminated in the creation of a mergers and acquisitions team at the end of January. Could it be that the company intends to gain a stronger distribution foothold in the UK by becoming a consolidator?
It is early days, of course, and the company is keeping its cards close to its chest. But there can be little doubt that Brown & Brown could have a big hand in the development of the UK market over the coming years. What is clear, despite the obliqueness of chief executive Anthony Strianese's remarks, is that the company is here to stay.
"We see this as an opportunity to add value for our shareholders. We view everything we do as a marathon rather than a sprint," he says.
"Hard market or soft, it will work itself out in time. We will get operating and build a solid entity. We have no rapid or slow growth plans."
