‘Now’s the perfect time to sell’ – that’s the message to commercial brokers from Bluefin CEO Rob Organ as he looks to continue the growth of the national outfit he runs.
Bluefin’s
most recent acquisition was Liverpool-based commercial brokerage Exchange Insurance Services, making it eight purchases since mid-2015 and Organ believes there are compelling reasons why now is the perfect time to take the Bluefin shilling.
“There’s a few reasons why I’d say that,” he told
Insurance Business. “One would be the obvious thing around price – multiples are high at the moment. I started doing acquisitions back in 2013 as part of our growth strategy and at the time multiples would start at about 1.4 up to about 1.6 but time and time again now we’re seeing 1.8 through to more than two times top line. It wouldn’t be unusual at all these days for people to be getting two times or even two times plus for an exceptional business. So that, compared to 2013 when it was say 1.4, is 50% more for effectively the same business, and that may not carry on forever. It’s a real factor for consideration.
“The other thing is that the market is changing a lot – it’s very competitive, customer demands are ever increasing, people are quite rightly expecting more of the broking industry. We’re an advice and services-based industry, we’re a professional industry so people should expect more from us, and they will. So businesses need to keep up with that client demand.”
Organ believes the introduction of the Insurance Act and new regulatory burdens may also act as a incentive to sell for some brokers, who will have seen the trade change beyond recognition from when they started out.
He said: “We’ve got the Insurance Act coming later this year, the first changes in the insurance business in 110 years. A lot of people went into business because they like looking after clients and suddenly they’re having to deal with regulation, changes in insurance law, having to think about how your processes change. There’s also potentially going to be more requirement to be transparent with fees and commissions as well, even if it’s not demanded by the regulator or legislation - consumers are more likely to want to know over time. So that transparency and disclosure piece could put pressure on your top line. There is capital available so a wise man might think now’s the right time.”
Bluefin has around 1,500 staff across its business, operating its broking business in 48 locations, with another 74 members of its network business all generating around £500m GWP, and Organ believes brokers considering selling should look no further when assessing potential suitors.
He said: “We look after our people, clients are at the centre of what we do, we’re here for the longer term, we’re not here to sell the business and realise value for ourselves over the short term – we have a proper, sustainable business here that does have people at the heart of it. A lot of vendors will say to me ‘other people might be offering me more money but what you offer is much more appealing and we value that’.”
