A LONDON and Glasgow-based insurance broker that secured a nine-figure investment in December is opening its first office in Edinburgh and seeking bolt-on acquisitions across Scotland.
PIB Insurance Brokers, which was launched in 2014 by a group of industry veterans led by Brendan McManus – the former chief executive of industry giants including RSA Insurance, Willis and Giles Insurance Brokers – is also opening an office in Dundee and plans to grow its UK workforce from 100 to 500 by the end of the year.
Regional managing director for Scotland Andrew Watson said wholesale consolidation in the industry had provided the right conditions for the emergence of a new independent.
“Fifteen years ago, Scotland probably had 40-50 good quality independent brokers,” Mr Watson said. “There are now probably fewer than 12, so customer choice has been significantly reduced. Secondly, the models of the biggest companies are more corporate and less customer focused. So we feel there’s a gap in the market to become a fairly powerful independent corporate broker with good old fashioned values that provides a service the customer wants.”
Mr Watson said the firm had ‘significant funding’ after a major investment last year, thought to be in the region of £500 million, from NASDAQ-listed Carlyle Group, the Washington DC-based global alternative asset manager with $188 billion of assets under management.
The new Edinburgh office, which will be based on Princes Street, will have an initial team of five and will target mid-sized family businesses in construction, professional services and real estate. The firm’s Scottish head office is on Nelson Mandela Place in Glasgow. It also has an office in Aberdeen. Mr Watson said consolidation had cast a lot of quality professionals into the market and that there was really no limit to the number of good people PIB could hire.
“We’ll grow in Scotland through three streams,” Mr Watson added. “We’ll grow organically, as any business would; we’ll grow by acquiring teams of people and we’ll grow by buying local bolt-on acquisitions, so we’re very acquisitive in terms of people and businesses.”
With consolidation sucking up Scotland’s bigger players – including the sale of Aberdeen-based Central Insurance Services to Marsh in 2014 and the 2013 sale of Glasgow-based Giles Insurance for £233m to Arthur J Gallagher, based in Chicago – Mr Watson said PIB would be looking for local brokers who were perhaps nearing retirement and wanted to exit the business while providing continuity for their staff and customers.
While the size of the insurance market has remained fairly static, Mr Watson said there were specific opportunities in areas like Aberdeen, where the declining oil price was prompting companies to review all their insurances with a view to making savings.
“There is also a lot of merger and acquisition work going on in Aberdeen’s small and medium enterprise market as companies are trying to get economies of scale to remain in business. We offer an M&A service which involves reviewing the insurance programme to check it is fit for purpose going forward.”
Earlier this week PIB announced its first UK acquisition with the purchase of Preston-based Fish Insurance for an undisclosed sum. The 40-year old firm specialises in insurance for people with pre-existing medical conditions and has 80,000 policyholders. PIB stands for Praetura Insurance Brokers, named after the title in ancient Rome given to army commanders and magistrates.
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