Southern invaders face a tough challenge from the local brokers
The battle for dominance of the Scottish broking market continues to rage. The poaching of Aon’s Scottish professional risk team by Marsh to boost its business north of the border is yet another twist in this tale, which has seen some of the UK’s major brokers look to build their presence in the region
Oval expressed its appetite to grow in Scotland after buying Glasgow-based, Service Miller in October last year. Then in March, it acquired Senior Wright’s retail book of business in Aberdeen, which covered areas including construction and fish farms.
A month later, Towergate bought JW Group Insurance and Risk Management which had a presence in six major cities and controlled premiums of £19m. This bought the number of Towergate offices to eight, across Scotland. At the time, the Towergate executive chairman Peter Cullum acknowledged that Scotland was “an important part of the UK economy” and that he wanted to “build a significant presence in Scotland”.
Meanwhile, Heath Lambert revealed its Scottish expansion plans with an announcement last May of plans to open a Glasgow office. The broker wanted to increase its presence in the country by adding to its Edinburgh and Aberdeen bases. It described the market as being “untapped”.
Despite the interest of the national brokers and consolidators, local Scottish brokers claim to be unthreatened.
“Brokers in Scotland with branches at the other end of the UK can’t crack this market because you can’t beat somebody in the local market,” says one independent broker.
He adds that the success of commercial business in Scotland has relied on the strong local relationships between brokers and insurers in the area. “And that’s why they make good solid underwriting profits each year, because they [brokers] work closely with the local market,” he says.
With this in mind, will Aon’s decision to service its Scottish professional risks clients from its Manchester office prove to be a wise move?
