Chairman denies underwriter is for sale, but Somerville broker sell-off fuels rumours
The high net worth insurance sector could be set for another bidding frenzy following speculation that Oak Underwriting is being primed for sale.
Insurance Times has learned that the underwriting agency may be placed on the market by its owner Somerville Holdings.
A leading market source said: "From the eye watering price paid for Home & Legacy, the success of the PI Direct/ Martello sale and the rumoured strong bidding for classic car business Footman James in the UK, the owners of Oak are understood to be considering the sale option very carefully.
"Oak will not remain an underwriting agency in the long term and it is a question of timing," he added.
But Andrew Cross, managing director of Somerville and chairman of Oak Underwriting, denied that Oak was up for sale. He said: "We are extremely proud of Oak and the whole group is totally committed to the company's future. There is no truth in suggestions it will be sold."
Despite the denials, speculation in the market about Oak's future has continued. It follows the sale of Somerville's commercial broking operations to Lark Insurance Brokers this week (see box).
Earlier this year, high net worth specialist Home & Legacy was sold to Allianz Cornhill.
It is understood the insurer beat off around 16 other companies for Home & Legacy, from bidders that included brokers, venture capitalists and insurance companies.
Oak is expected to generate similar interest if it is put up for sale, and could generate an asking price of between £30m to £40m.
An industry source said: "Interested parties would include Royal & SunAlliance and Allianz Cornhill. All the HNW players would also be keen, but these two have shown the appetite to pay a big price recently with Home & Legacy and Martello/PI Direct."
Oak specialises in high value homes covering buildings, contents, fine art and antiques.
Lark buys Somerville
Somerville Insurance Services, the company's Lloyd's broker, has been sold to Lark Group. Following the acquisition, Lark will have annual revenues of around £17m and employ about 240 staff in six offices across London and the South East.
The transaction does not include Somerville's IFA business, Somerville Financial Services or its underwriting operations.
It is the fourth acquisition by Lark this year, after the purchase of ascot Insurance Brokers, Argent Insurance Brokers and Tolson Messenger.
