EXCLUSIVE: Broker Network and Compass join together under wider group

The owners of Broker Network and Compass are bringing the two networks together under a single umbrella company in a wholesale rebranding of the group.

The networks will form two of the three pillars in the wider Bravo Group.

The third pillar making up the group is the Broker Network Partners division (the advisory broking business), which has now been rebranded and renamed Ethos Broking.

Former Broker Network chief commercial officer Des O’Connor, who was previously named as the network’s new chief executive in December following Andy Fairchild’s departure, will head up the Bravo Group.

O’Connor explained to Insurance Times with Fairchild’s departure after five years as chief executive, the investor’s decided it was a good time to re-evaluate the business and put more emphasis on the collective Bravo Group, which had previously been a holding company.

“We’re presenting to the market a new narrative around the Bravo Group,” O’Connor said. “This narrative is around the federation of three very clear businesses, who are all independent and which are all tailored to supporting the regional independent broker.”

Leadership

As the first chief executive of the Bravo Group, he will have overall leadership of Broker Network, Ethos and Compass - a more comprehensive role than that previously held by Fairchild.

A Bravo executive committee has also been made up, consisting of the leaders of the three firms. The full team still being finalised.

John Lincoln will continue in his role as managing director of Compass, chief network officer Richard Pitt will take the lead on managing Broker Network’s membership, and Ethos will be run by chief operating officer Susan Adcock and chief development officer Richard Tuplin, who joined from Jelf in September.

Former Broker Network and Compass executive chairman Alex Alway becomes non-executive chair of the Bravo Group.

The reorganisation gives Bravo a 60% share of the network space according to O’Connor, made up of the 230 Compass members (£600m GWP) and 550 Broker Network members (£1.8bn GWP). Ethos is also sitting at 480 staff with plans for over 600 employees by the end of 2019.

Distinct

But O’Connor said the propositions offered by each network were very different, and that each would remain distinct. Broker Network members will only have access to Broker Network insurance services, and Compass members will only have access to Compass insurance services.

“It’s important there’s no confusion in the marketplace,” he said. “Broker Network has a compelling service led proposition. Compass has a compelling insurer led proposition.

“They attract two very different types of member and we want that to continue because it allows both businesses to grow.”

Where the integration under Bravo could deliver most impact is for the Ethos brand, with Ethos brokers now able to access services associated with both networks.

Ethos, consisting of eight regional hub brokers acquired over the last three years, will continue along the same model as Broker Network Partners - offering to buy network members looking to sell up that want to retain the services associated with being a network member.

While in practice the 12 acquired satellite firms have been a mixture of members and non-members, O’Connor said that with the restructure a stronger emphasis will be put on encouraging Compass brokers to sell into Ethos when they come to look to release the equity from their business.

So far no Compass members have sold into Ethos broking, but O’Connor said this would change in the future.

“I want Compass members to be aware, just like the Broker Network members are aware, that they have optionality when it comes to their own exit,” he said. “Now instead of targeting 550 members, we’ve got 780 members to offer it out to.”

London market

Part of the Compass acquisition last year included buying Compass London Markets. By coming together under the Bravo Group, O’Connor said this offering was now being pushed more strongly on Ethos brokers and satellites.

“Now we own a Lloyd’s broker which understands regional broking, so we have increased optionality there,” O’Connor said. “Ethos is now working very collaboratively with Compass London Markets, and we expect a lot of growth here on the back of an increased collaboration with Ethos.”

The result will be a significant trimming down on the number of Lloyd’s brokers the group will work with, as more emphasis is placed on dealing through Compass London Markets. O’Connor highlighted Bishopsgate, owned by the same investment partners through Ardonagh, as another Lloyd’s broker the group would continue to deal with.

“We need a less confusing Lloyd’s broker strategy,” he said. “At the moment we are trading with lots. We will definitely be trading with fewer, and we will concentrate it into Compass London Markets, because they are part of the Bravo Group, Bishopsgate because we have a healthy trading relationship with them and maybe a couple of others because we may need some specialist Lloyd’s brokers to support our growth story.”

Acquisitions

O’Connor confirmed no replacement would be hired for his vacated role of chief commercial officer, and said he would continue to take the lead in acquiring new hub brokers for Ethos. The target remains to have 12 by the end of the year.

“Our pipeline has never been more active, and I think we’re going to have a great 2019 in terms of M&A,” O’Connor said.

Ethos currently writes £200m GWP and through acquisition and organic growth, he hopes the company will be writing £300m GWP by the end of 2019.

He said the rebrand to Ethos was important to make it clear to the market that the company is primarily an advisory business.

Ethos will work similarly to some well-known consolidators in the market, buying smaller brokers through investor backing, and over time integrating these firms as part of the hub brand. O’Connor suggested the broker may even go on acquiring after hitting the target of 12.

Independence

But O’Connor stressed the hubs all remained independent brokers.

O’Connor said: “In terms of speaking with one voice to the market, when they’re having any supply chain discussion, whether that’s with an insurer, or premium finance, they can use the narrative of Ethos.

“They can say we’re not a £10m broker, we are a £200m broker going up to £300m.

“It’s the benefit of dual branding - on one hand the hub and on the other side, part of the Ethos Broking group.

“But they will all keep their brands, which is in tandem with protecting them as independent brokers.

“They go back to their regions fuelling their own independent growth.”