“We’d seen them and their team at events and things, and they are very well-respected,” he said. “So, I spoke to them about what their succession planning was, and whether they had any plans for what they were going to do next. Over time, we agreed a deal and then it was just a case of getting the FCA to do their bit before, in November, they became part of The Needham Group.”
Why Corporate Insurance Solutions was the right fit
As with all the deals done by Needham in the past, Lowe said, CIS was the right fit for a variety of reasons – not least for its talented team and shared values. CIS’s book of business also provided great symmetry, he said, because it aligned closely with Needham’s core areas of business and was well within the group’s comfort zone. That the company directors and their team would come across under the terms of the deal was another critical advantage.
“It was key for us, as it was with Baldersons, that there was already a team in place, already a manager of the office there,” he said. “We’re not looking to change anything people-wise. The people still work with each other, with their clients. We’re just hopefully improving the offering that they can deliver to their clients. That’s really the aim.”
The key concerns facing insurance brokers
Whether considering or completing an acquisition, Lowe said, the philosophy of Needham is clear and it centres around the question, “what can we do to help the existing business to achieve more?” Looking across the market, he highlighted that two key pain points are frustrating insurance brokers at the moment – the level of compliance required and access to insurers.
Needham’s offering has proven very attractive to broking leaders looking for the next steps and keen to circumvent these challenges. The group has its own compliance team, he said, and is able to navigate the complex regulatory environment in which broking businesses operate. In addition, it recently went live on Acturis which has given the team access to a lot of very strong insurance companies.
The move to Acturis aligned with the group’s rebrand as when filling out new documentation, the team realised they needed a company name to bring all the businesses together. This was particularly important, Lowe said, as a critical part of Needham’s M&A offering is understanding the value and history of an acquired business’s name and ensuring they can keep that part of their identity.
To bring everything together under the umbrella of a company name was essential and as the group has a few more acquisitions planned for 2023, it made sense to do that sooner rather than later. It sets the business up for the next five-to-10 years of trading, he said, and makes it a great deal easier to sit down with other business owners and explain The Needham’s group philosophy and offering.
What’s next for The Needham Group?
“We’ve got a couple of other acquisitions lined up at the moment for next year,” he said. “And they’re following exactly the same philosophy where we’re sitting down with those owners and we’re asking them ‘what keeps you awake at night?’ And the answer is [always] increased regulation and having those relationships with insurers. They’re the two key drivers for them in thinking about who to partner with going forward.
“When we say, ‘well, you’ll keep your name’. That name that’s been part of your business for however long [you’ve been operating] will be retained, and you’ll become part of The Needham Group, and we’ll sort out all your compliance and we’ll give you access to some more markets, and higher-level access to some of the markets you’re already dealing with – well, that’s what they want, so they like that approach.”
Looking to Needham’s future, Lowe highlighted that M&A is only part of its growth strategy and one that has to work in tandem with continued organic growth as the business aims to hit a turnover target of £20-plus million GWP by 2025.
“So, the plan for 2023 is to keep speaking with more business owners, explaining our offering and seeing if it is of interest to them and the businesses,” he said. “I expect to have a lot of conversations next year with business owners promoting The Needham Group. I know some of them will love what we are proposing, and it will be suitable for us to take those discussions further. I’ve already had some conversations that may come to something, they may not, but we just need to keep talking to people.”
What are some of the key pain points you are seeing impact insurance brokers considering selling their businesses? Feel free to comment on your findings below.
