Broker briefing: Lark gets back on the acquisition trail

Name of broker: Lark Insurance Broking Group

Office locations and number of staff: five offices and 266 staff in London, the South and the South East

GWP controlled: £92m

Major clients: property owners, banks, family offices, business leaders, private collectors, estates and celebrities

Most recent results: £2.5m post-tax profit for the year ending 31 March 2010

Senior management: chairman Graham Lark, managing director Stephen Lark, commercial director Mark Woodward, private client director David Foster

Lark Group started in 1948 as Roger Lark & Sons, founded by Graham and Roger Lark. Seven members of the Lark family have worked for the business over three generations.

Managing director Stephen Lark, however, doubts that more members of the Lark family will come into the brokerage, partly because Groupama bought a majority stake in it in 2007 and also because he thinks the industry is now less accepting of family businesses continuing. “Now, it makes it more difficult for a family member to come in and prove themselves," says Lark. "You’ve always got spotlights on you, and it makes life a bit more tricky.”

Lark Group specialises in the private client, listed building, high-value musical instruments and mid-to-high net worth personal homes markets.

The firm is looking to get back on the acquisition trail after a few years out, Lark says. Its last acquisitions were a staff member and book of property business from Grosvenor Court Insurance Services and a buy-out of Hampshire-based broker Griffiths Good. The deals took place around January 2008.

Lark says the broker now wants to buy one or two brokers a year, with a war chest from Groupama. “We’ve been very steady and haven’t done a huge number of acquisitions over the years, so one or two a year would suit us very well,” Lark says.

Lark says the perfect fit would be a broker with a commercial and/or private client focus. The firm sees a gap at the top-end of the private client market, and is keen to increase its book there.

“What we’re not interested in is run-of-the-mill household books that can be readily attacked by aggregators,” Lark says. “If anything, we’ve pulled away from those sectors to specialise more in areas that are subject to less broking and insurer competition.”

The biggest headaches for Lark Group this year have been soft commercial rates, insurer dual pricing, VAT increases, clients looking to cut costs and FSCS levy increases. “Those additional lump sum costs that are outside your control are tough when revenues are under pressure,” Lark says.

He says the broker has found it easier to navigate through the tough economic times because of the financial strength and loyalty of its core private clients. “Most private individuals’ wealth and assets have been relatively stable,” Lark explains. Another advantage, he says, is the personal relationships its team has built with their clients.

Lark’s main commercial insurer partners are RSA, AXA, Allianz, Zurich, Aviva, Chartis, NIG, Chubb and Hiscox.

Key private client insurers for Lark are Hiscox, Lloyd’s, Zurich, Chartis, Chubb, Groupama, Aviva and AXA.