For insurance brokers and their investors, the key challenge now is uncertainty in the market with respect to value. The war in Ukraine, rapidly rising inflation and interest rates, continued disruption to supply chains and challenges raising funding in the debt markets are combining to create a perfect storm of issues.
Loading transcript...
This is having a significant impact on valuations and potential prospects for growth. Peak valuations for leading brokers have recently hit multiples of between 18 and 20 times the EBITDA in the UK/US markets. While investors expect values to decrease, we lack market test cases with some platforms still coming to market with high expectations; in this type of situation, someone could make a costly mistake.
On the growth side, client acquisition is now harder than it used to be due to the hesitancy of customers in the market; as a result, SMEs and SMBs are under stress. Brokers struggle to win new business in an environment where no one wants to pay more for insurance, but they keep seeing price increases as inflation disrupts the market.
“Refocussing on the fundamentals of business will be the best way to build real resilience in the challenging year ahead.”
— Sam Halliday, Partner, London
To support growth ambitions, we help clients develop a better understanding of their customers and product penetration. Knowing what customers want and identifying unfulfilled needs is a powerful way to drive organic growth and foster strong business relationships.
We help our clients identify efficiencies and cost savings within their business by leveraging our knowledge and experience to assess processes and make strategic recommendations for improvements. Good carrier management and rationalisation of suppliers pays dividends here.
In the year ahead, businesses that are investing in organic growth levers will be better positioned for success, as this focus allows them to be buyers of means.
Now is the time to master these complex fundamentals and to get your house in order, optimise you processes, and keep your systems sharp. Refocussing on these levers will be the best way to build real resilience in the challenging year ahead.
We are quite unique in serving European and North American clients with a joined global proposition. This broad expertise means that we have examined multiple business models in numerous markets and have seen what works best as we apply our experience to new challenges.
As a data-driven organisation, our core goal is to deliver the data required for decision-making and solving problems. Only through having explainable, actionable and impactful KPIs can businesses drive meaningful change.
