John Jackson says the buying and selling of brokers has reached fever pitch, but it's good for business
Such is the current buying and selling frenzy involving brokers that it resembles an ebay marketplace for high rollers. I would not be surprised to see a Tesco special offer: buy one broker, get one free.
There are brokers buying brokers, broker networks recruiting brokers, and, strangest of all, insurers buying brokers.
Take an insurer such as AXA, with its purchases of Stuart Alexander and Layton Blackham – and its latest acquisition, Smart & Cook.
Whatever vehement denials there may be to the contrary, the continuing independence of such brokers longer term must be called into question. Moreover, will other insurers stand idly by while the AXA juggernaut thunders on?
And the bartering is set to continue apace. The roll call of players in this hectic market seems endless. Australian insurer OAMPS is on the prowl, niche PPI provider British Insurance has put itself in play, the AA is likelyto come to market along with Saga Group, and Broker Network is looking for major expansion.
Towergate continues to tower aloft in this market, and even Giles Insurance Brokers is on the move, cheque book in hand, while Swinton is on the look-out for commercial brokers.
Not to be left out, Lloyd's, with 167 currently registered brokers, has eased the rules to allow easier market access for brokers.
But what goes up, as has been said about umbrellas, can also come down. Catlin's takeover of Wellington has resulted in staff leaving, underlining the fact that there is often a price to be paid when these changes of ownership occur.
The human factor is difficult to calculate in takeover budgeting.
Moreover, it is an irony that the direct writers, once seen as the equivalent of the Black Death for brokers, have largely been seen off, not least because there are so many of them that consumers have become bewildered.
It is ironic, then, that it is within the intermediary market that the threat to brokers now comes.
All this is happening in a soft market. How long before prices start to be chased down in a desperate bid for business to satisfy shareholder demands?
For old hands this will have the ring of déjà vu about it.
Nevertheless, as this column has pointed out before, the number of brokers may decline or find different owners, but the market tends to get bigger, so there is more around to be shared among fewer players.
Not exactly a negative business situation for a market noted for its entrepreneurial broking spirit. IT
