Keeping up with the AXAs

Ecclesiastical has become the latest insurer to jump on to the broker buying bandwagon, with the acquisition of South Essex Insurance Brokers.

The insurer’s UK managing director Steve Wood acknowledges that the move is in part a response to the acquisition strategies of other insurers, but he insists it was not the key driver.

In fact, he says the company has been looking at acquiring a broker for over a year. He also says Ecclesiastical is looking to become “more progressive” in its thinking.

The prime motivator for the acquisition is SEIB’s distribution capabilities. SEIB, which controls annual premiums of around £28m, has an established distribution network of sub-brokers through its schemes business.

It is this sub-broker network that Ecclesiastical wishes to tap into, using it to distribute some of its own products, such as charities insurance cover.

Wood insists, however, that SEIB will remain an independent broker.

It appears that Ecclesiastical’s strategy is broadly similar to Groupama’s, in that it is carefully chosen a broker that can be used to sell its products, probably through vehicles such as exclusive schemes, which will, it proposes, not damage the independence of the owned broker.

Wood says Ecclesiastical has not ruled out making further acquisitions, although there is none planned at present.

This is in contrast to AXA which has positioned itself as a consolidator without any apparent strategy by the insurer parent to use its acquired brokers as a distribution vehicle.