AXA's broking operation will take fresh steps to assert independence after Smart & Cook buy
AXA's new commercial broker will make further efforts to allay the market's concerns over its independence following the acquisition of broking powerhouse Smart & Cook.
The acquisition, which was officially confirmed this week, will create a broker controlling £450m in premium.
AXA UK said the acquisition, through its Venture Preference brand, had created the second largest SME broker in the UK. The move follows its purchase of Stuart Alex-ander and Layton Blackham in January.
Paul Meehan, group chief executive of Smart & Cook will join Stuart Reid and Chris Blackham on the board of Venture Preference, where each will be
chief executives with complementary responsibilities.
Since AXA began acquiring brokers there has been concern that it was trying to buy market share. Insurers and brokers have been looking for assurance that this is not the case.
Reid said: "It has been 12 weeks [since the acquisition by AXA]. I hope our actions have evidenced what we said would be the case. We will now be doing the rounds with insurers to claim independence."
He pointed to two recent commercial motor arrangements in which Norwich Union (NU) was appointed as lead underwriter as evidence of the broker's independence.
The deals saw NU take a 40% share of a £25m commercial motor scheme underwritten by Layton Blackham's Elite Underwriting facility. NU was also chosen as the insurer of Layton Blackham's first solus motor arrangement, worth £4m in gross written premium.
Reid said the Smart & Cook acquisition was likely to be AXA's last large acquisition. "Our strategy was to obtain countrywide coverage. We now have a presence in the South, the Midlands and the North."
He said the operation would focus on acquisitions with integration coming later. "We have had no discussions on how it will be combined."
Reid added that further acquisitions would be announced in the next few weeks.
The three companies will operate under their original structure, and will operate from 40 offices employing some 1,200 people.
AXA paid £58.5m for both Stuart Alexander and the remaining 61.1% of shares it did not own in Layton Blackham, according to the insurer's 2006 management report. The insurer also revealed it paid £75m in cash for insurer Swiftcover, with a potential earn-out of up to £195m over four years.
