French connection: Latham and Campling tell Insurance Age how the businesses will come together as part of French firm Verlingue.
▶ When did you come into insurance?
Mike: Having failed at an attempt to be a fighter pilot, apparently I was too tall, I worked at Sun Alliance from 1989 to 1995 as a trainee motor underwriter. Then Lombard General prior to its merger with Gan and then Independent.
The first call I had within a day of Independent [being shut] came from Jon Manson. The more I spoke to him the more I saw the opportunity [at Manson Insurance Group] was right. We grew the business prior to selling to Jelf. I joined as a senior account executive and worked up to managing director.
Neil: My route was simple. I started out of college in 1977 with Barnett & Barnett as a trainee, did my exams and worked my way up. I joined the board around 1980 and five years later led a management buyout (MBO). We jumped on board with IAG in 2007 and then we got to buy NBJ which more or less doubled the size of the business overnight. When IAG decided they wanted to pull out of the UK we bought it back in 2013 and became ICB, since then we have gone from strength-to-strength.
▶ Why did you choose insurance?
Mike: It was a case of pick up the careers book in the college library and flick through the pages and see what took my fancy. I never imagined working in insurance but quickly understood it was a good industry.
Neil: My experience was not dissimilar. A friend of mine started in broking when I was still in college and suggested it was fun and interesting so I had a chat with our careers officer. They knew someone looking to take on some trainees. It was with John Barnett in Isleworth. The first thing I had to do was find out where Isleworth was! But I went for the interview and got the job.
“Neil and I have invested a large amount of time with each other and our businesses to understand what we have and the opportunities”
▶ What was Finch like in 2012 when you joined?
Mike: I found a very well-regarded, competent insurance broker with some excellent talent. It had about £24m of GWP. Verlingue had bought it in 2007 and spent time developing the business. My first task was to give a good platform for organic growth. My style was to lead and create a vision while adding to the existing talent pool and give them a structured business so they could spend time with clients both renewing business and winning new opportunities.
▶ What was ICB up to in this period?
Neil: We are definitely advice-led rather than transactional. The more technical sectors are now more dominant in the business. We’ve developed risk management and grown our capabilities. We concentrated on the CII qualifications as well to equip our people and have shifted our sights slightly higher and are competing on larger private limited company clients.
▶ Which brings us towards this year’s deal, but first, what are Verlingue like?
Mike: Neil will find bosses who give a lot of trust and room to grow with a lot of space for entrepreneurial spirit. They are very much about working in partnership. As you would expect, the challenges from them are strong – that is part of the deal, after all they are our shareholders.
Neil: I met Jacques Verlingue [the group chairman] and he is extremely passionate about his business. It is a third generation privately-owned company. It was made very clear that this is the way it will continue. He is full of energy and enthusiasm and respects quality. He is clear about how important clients and people are to success. It is very much a long-term stable approach.
▶ Why did the deal happen?
Neil: When we did the MBO from IAG we all signed up for a minimum of 10 years. We had started to talk to the next generation of management coming through to see if they were interested in a further buyout. But the size of the company meant it was always going to be very difficult. Brexit started to concern me as we do business in the Republic of Ireland, France, Germany. It wouldn’t be impossible to place that business but we would lose relationships and income. I started getting questions from clients about what we were doing. When Verlingue came along it ticked a box.
Mike: One of the challenges for Finch was it lacked scale. It lacked the opportunity to have the resource that ICB had around risk management, credit, wealth management. It was a perfect mix.
Neil: We wouldn’t have entertained a conversation without establishing that these are long-term players. They won’t buy it and flip it. So in many respects it met the aspirations of the next generation coming through as they could see a long-term business that is larger and creates opportunities. It is exciting.
▶ Any more deals planned?
Mike: The primary focus is organic growth. Bringing the two businesses together gives us a greater platform to provide an even stronger client proposition. Another acquisition hasn’t been ruled out but it would have to be the right company in the right area with the right people. We are open minded but it is not a priority. It would be more likely to be something significant than something bolted on.
Neil: The priority is to bed this in properly first, but there are like-minded broking businesses out there who would not sell to a consolidator come hell or high water that would find the Verlingue proposition very attractive. When we are ready there may be more down the line but that is not the model.
“[Jacques Verlingue] is full of energy and enthusiasm and respects quality. He is clear about how important clients and people are to success”
▶ How has the start gone?
Mike: We are running two individual businesses that are completely separate. We are ensuring that we don’t take our eye off the ball. We are drawing up plans for how to bring the two businesses together. Neil and I have invested a large amount of time with each other and our businesses to understand what we have and the opportunities. We want to preserve the great parts of both businesses and enhance the overall.
Neil: It has been pretty much as I anticipated. The shareholders are the owners and you can take a common-sense, long-term approach. It has been great and we have got a lot done. We are getting the high-level ideas into play. The collaboration has been fantastic with a great spirit of cooperation.
▶ You’ve set the target date for the single entity as 31 December next year, what comes next?
Neil: The structure will be to divide up the different areas of the business. The driver will be corporate and speciality and the other areas of the business will complement those areas. There are good opportunities for the next generation coming through. This is only going to get bigger and if we can get the European bit right it will be a great business to work for.
Mike: It is ensuring that we take the whole of the teams with us. It is about making people feel engaged. The danger is of some people thinking it is not the right environment for them but so far I don’t think either business has heard even a murmur of negativity.
Emmanuel Kenning – Insurance Age