Independent broking network Brokerbility is targeting brokers with younger management teams in a bid to avoid clashing with consolidators, managing director Ian Stutz said.
Today the network revealed that its latest member is Glasgow-based CCRS. The firm generates between £5m and £10m in gross written premiums, Stutz, pictured, estimated.
This is significantly less than some brokers that have exited the network. For example, Alan & Thomas was acquired by GRP late last year. At the time it handled roughly £30m GWP annually.
Stutz told Post: “I haven’t got the exact numbers, but I would imagine it is between £5 and £10m GWP.
“The most important thing for us when we look at a broker is their behaviour, the plans they have for the business, their desire to want to work with insurer partners, professionalism.”
Stutz was quick to dispel any suggestion that the network had shifted the goalposts when seeking out new members with younger management teams.
He said: “The brokers that have sold have all been of a size when they were original members. To be fair, the consolidators continue to target brokers with an Ebitda of £1.5m to £2m and there are fewer and fewer of those around.
“One of the things that I’ve been interested in in terms of our recruitment is finding the hungry, young businesses that are going to be £1m or £2m Ebitda in 10 years’ time. I’ve been trying to focus on the management teams that are under 50. Neil [Campbell, CCRS managing director] and his team fit that.
“I wouldn’t expect the brokers we go after with young management teams to be anywhere near the size that those older established businesses that left us. Nearly every broker that’s sold was with us right from the start and had been with us for 12 years. There is nothing to say that Bolams, that joined us, Henshall that joined us a few years ago, there’s nothing to say that they won’t be up at that level by the time they reach the age of 60, 65.
“It is a fact of life. Independent brokers sell. That is what happens. They reach an age when they do that. And it tends to affect those who get to the end of their life cycle. I’ve noticed, certainly in our group, that the life cycle ends at around £20m to £25m GWP, or £1.5m to £2m EBITDA,” Stutz added.
36 remains the “perfect” number of Brokerbility members, according to Stutz. The network will continue to target new joiners, but is not in too much of a hurry. Its membership now stands at 27 brokers.
He added: “We have lots of conversations going on. We have got a really healthy pipeline. All those values, which as I have said CCRS have, are exactly what we are looking for in the potential new brokers. So we are working our way through that. We are not in any particular rush. We have still got a healthy number of brokers, we have still got a healthy GWP amongst them. The brokers that are in the group continue to grow. But yes, 36 has always been the ideal number. If we can find them, they will be joining us.”
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