Elliot Lane says the inflated prices being paid for brokers will deliver the customers, but won't guarantee performance

Watching the recent round of deal-making in the industry, a comment made by the novelist Martin Amis springs to mind.

He wrote that when he was a young boy he asked his father, the author and academic Sir Kingsley Amis, whether their family was nouveau riche. His father replied: "We are very nouveau, but not at all riche."

The industry's new wealthy, where some insurers and brokers are gaining the Goldman Sachs' notoriety of the 'have and have-yachts', are benefiting from liquidity in the money markets, but also the pressure on the distribution channel.

Ownership of the customer though is hard to crack. The exorbitant price tags placed on niche players such as Carole Nash and Footman James is based on their brand and customer base.

Provident, an insurer which specialises in older drivers and young women motorists, is up for sale, but at an asking price of £230m, which is five times net assets. Many potential bidders have baulked, and then walked, at such an inflated price.

Provident's core market is highly competitive, but since Australian insurer IAG entered the market last year and bought Hastings Direct and then Equity at such large amounts, the motor sector has been repriced.

If customers are fickle, then loyalty of staff in today's market is probably just as difficult to control. Just ask Catlin. Since it was acquired, the doors of Wellington's Leadenhall Street offices have been revolving at breakneck speed with hardly any senior staff left.

However the spending spree in the insurer market is the story of 2007, and the year has only reached February. One analyst said the old purchasing model of 2.5 times GWP is no longer relevant. Deals are now based on strategic worth to the buyer, which is why Groupama is rumoured to have paid 13 times the book value for Carole Nash.

The worry for many insurance chief executives, like football managers, is, did you spend £30m on a Wayne Rooney or have you acquired a Shevchenko? And if you've bought a Shevchenko will two goals against a second league side like Wycombe suffice? IT