EXCLUSIVE: Independent intermediary business The Clear Group has bought “real prize” London-based broker Centor Insurance and Risk Management in its second largest acquisition to date, subject to regulatory approval.
Howard Lickens, executive chairman of The Clear Group – who described Centor as a “high quality” and “respected” chartered broker that he has known for years – anticipates that the deal will complete within the next two months.
Commercial insurance focused Centor was established in 2004 by chief executive Neil Walton. The business has a strong presence in the London market, handles gross written premium of around £40m and has an annual revenue of more than £6m.
Following the acquisition, Centor’s team of 50 staff will move to The Clear Group, while Walton will “gradually edge himself away from the business”, then “disappear and play with his other interests”, Lickens told Insurance Times.
The motivation for buying Centor is threefold, Lickens continued.
Firstly, The Clear Group and Centor have a number of business areas that “overlap nicely” – for example, employee benefits, high net worth, property and real estate. Adding Centor to The Clear Group’s ranks therefore helps the broker to “get greater critical mass”, “a better proposition” and “clout” in these sectors.
Centor is additionally “very strong” in serving mid-corporate clients, Lickens said, often acting in the “battleground between the regional brokers and the global brokers”.
“That’s something [where] I think the two of us together will help each other,” he noted.
Secondly, The Clear Group plans to take advantage of Centor’s London market expertise to further build out its operations there.
The Clear Group, which became a Lloyd’s broker around four years ago, already has around 150 staff based in the capital, as well as London market specific teams – following the deal with Centor, this will increase to around 200 London-based employees.
According to Lickens, a larger London market footprint is imperative as a result of the hard market.
He told Insurance Times: “We’re quietly setting up a counter force against the really large [global brokers] because we can start to compete with them because we have access to all the markets, not just a few.
“The main areas that we use are always the professional lines – the professional indemnity, directors’ and officers’ and the legal indemnities have always been our real big home.
“As the composites have found capacity more and more of a problem, frankly [there is] a greater need for the London market for property and for casualty generally. It’s probably just a feature of the hardening market.”
Lastly, The Clear Group was attracted to “the soft stuff” surrounding Centor – Lickens explained that Centor had won awards for the way in which it had built its team, including a number of Best Workplaces and Investors in People accolades.
He continued: “That culture piece – that ‘do I want them in my group, are they the ones I want in my team?’ – that’s really important to us. It’s not just a simple financial deal when we take on a business – it’s how will they fit in the culture.
“Everyone talks about culture – we actually believe it. The soft stuff is important to us, it’s not just sticking plaster.”
Walton added: “We’re delighted to be joining the Clear Group. Although we spoke to many potential buyers, Clear was undoubtedly the best home for our business.
“It’s culture, focus on niche markets and opportunities for our staff make it the perfect fit.”
More ‘substantial’ deals ahead
The transaction to buy Centor marks The Clear Group’s 33rd acquisition since it was established in 2001 – the business now handles more than £300m in premiums and employs 550 staff across 13 offices.
Although the firm will not be re-branding Centor into The Clear Group fold immediately, Lickens predicted that the broker will be co-branded with its new parent within 12 months. Furthermore, he hopes to “slot” members of Centor’s staff “into our own leadership team”.
Despite being “very, very pleased” with the purchase of Centor, Lickens added that The Clear Group has “another substantial deal I hope to be able to announce next month”.
He continued: “We’ve got a very solid pipeline – not had a stronger one before. We’re pretty busy I’m delighted to say.”
When planning The Clear Group’s M&A activity, Lickens noted that the broking organisation is “quite a broad church” that generally likes “the small owner managed businesses”, such as “the little two, three, four-man-band”.
Lickens was quick to add, however, that the firm is also open to “much bigger opportunities” too.
He said: “It’s to do with are they writing the sort of business that we’re interested in – we fundamentally are more interested in books of business that are people-orientated, that aren’t purely transactional.
“We’re not an aggregator, we’re not trying to do lots of transactional business particularly. So, if it’s a relationship-based business, mainly commercial, we’ll look at it.
“And now [The Clear Group’s] coverage is widening out [across the UK], we’re absolutely keen to look at most things.”