More M&As predicted for UK brokers

Europe

Maritime and insurance consultancy, Moore Stephens predicts further consolidation and convergence in the UK insurance underwriting and broking sectors. The firm notes that it is no longer only brokers who are looking to buy other brokers. “Insurers and financial institutions are now buying brokers, too, as part of an overall drive to secure the distribution chain, to increase competitive market share, and to secure bulk access to the market. Despite the tough compliance environment, the market continues to gravitate towards consolidation in both the broking and underwriting sectors,” Simon Gallagher, who heads up Moore Stephen’s insurance practice group, explains. According to the firm, the mega-trend in the market across all disciplines is towards convergence. Mr Gallagher describes regulatory controls such as Solvency II as a result of geographical convergence. The common language that is emerging is one based around compliance, capital and controlling risk. There is greater pressure on insurers in today’s soft market to be more disciplined in the business they write and in the rates at which they subscribe.