Broker briefing: Barbon is looking for a network move

Name of broker: Barbon Insurance Group

Office locations and number of staff: nine offices across the UK, about 700 staff

GWP controlled: £150m

Major clients: large commercial property owners, managing agents, landlords and letting agents

Most recent results: £6.96m operating profit, 2009 (up 36% from £5.13 in 2008)

Senior management: chief executive Martin Oliver, group managing director Nick Sharp

Barbon was created in 2008 from Erinaceous Insurance Services. Led by chief executive Martin Oliver, the ultimate shareholders of Barbon are Lloyds TSB and HSBC, which have a 50:50 split.

Barbon has three lettings divisions, run from the offices of past acquisitions. Letsure managing director is Ian Fraser; Homelet managing director is John Boyle; Rentshield managing director is Gary Abraham.

The Barbon property and commercial division includes Cadogan Hanover Park, Cadogan Keelan Westall, Deacon and Keelan-Westall and is overseen by chief operating officer Mark Armitage, who joined from Towergate.

Other Barbon acquisitions are Farr and Zennor, which specialise in social housing and commercial property insurance.

Barbon has offices dotted around the country in Glasgow, Lincoln, Chelmsford, London, Croydon, Hampshire, Bournemouth and Devon. It employs just over 700 staff and has a GWP of about £150m.

Group managing director Nick Sharp says Barbon’s major clients are large commercial property owners, managing agents, landlords and letting agents.

The broker deals predominantly with commercial business, and Sharp estimates that less than 2% of its premium comes from personal lines. “If it’s got a roof on it, in a commercial sense, that’s what we do,” he Sharp adds.

Barbon is hungry for acquisition, and wants to make up to five purchases in the next two years. Sharp says the company is keen to look at businesses in the residential and commercial fields.

Barbon is not just considering individual brokers. “A network acquisition would be a good move for us,” says Sharp.

This would give Barbon a good route to market for their products.

The company is not interested in buying and subsuming brokers as a consolidator would, adds Sharp – the businesses Barbon has already bought have a lot of devolved authority.

“We want the people who own the businesses to stay in the businesses, because they know how to run them better than we do. We don’t want to dismantle that,” says Sharp.

He believes the biggest gains in the past year have come from its lettings division operating in a healthy market. Meanwhile, its biggest challenges have come from the competitiveness of the property and commercial side of the sector.

Sharp says there are too many brokers chasing premium and driving down overall prices. “We’ve created an impression that cheapest is best. I don’t like that,” he says. “As an industry, we tend to undersell the value we bring to clients.”

Barbon’s main insurer partners are Aviva, Allianz, AXA, RSA, Groupama and Zurich, for which it has delegated underwriting, policy delivering and small claims handling authority. The broker also rates business and issue documentation with Brit, Ageas, MMA and NIG.