The insurance sector has a tough gig. Players operate in a highly populated and competitive market serving a highly price-sensitive client base. The plus side is that the market is large: in 2023, the general insurance market in the UK generated gross written premiums (GWP) of £122.1 billion and expected to grow c. 5% CAGR through 2028[1][2]. Across wider Europe the market is projected to reach €1.5 trillion in 2024[3]. Future growth is expected to come from specialised areas like cyber insurance and natural catastrophe coverage.
Challenges for the sector include regulatory changes, climate change leading to more natural disasters, and low interest rates which can impact profits. Nowadays further competition comes from new entrants which benefit from a lack of ageing infrastructure and can hit the ground running with modern systems and tech-enabled efficiencies.
As ever, challenges create opportunities. In addition to growing areas such as health insurance and new areas such as cyber, there are nuances across geographies. The UK market for example is heavily penetrated by brokers (c. 80% of GWP) and has been undergoing consolidation for over a decade, while Germany, another sizeable market, is more fragmented as it’s yet to undergo the M&A already seen in the UK.
“This dynamic creates real potential for European mid-market businesses in the space to scale,” says Andrea Bertolini, Partner and Head of Financial Services at Inflexion.
Andrea Bertolini, Partner and Head of Financial Services, Inflexion
There also opportunities for insurers to undertake M&A, both domestically to scale and internationally to expand footprint. This has been underway in the UK for over a decade but is less progressed on the Continent. Private equity can also support succession with founder-led firms.
“Regulatory change has been driving activity across the insurance industry for years. The UK in particular has seen a lot of interest in financial backers consolidating a fragmented industry, with scope for scale as well as organic growth as digital capabilities are invested in. Many of these dynamics can be applied to companies in Europe as well,” says Nick Davies, Assistant Director at Inflexion who has led a number of the firm’s insurance sector investments.
Inflexion has helped a number in this space to grow sustainably:
DR&P – Inflexion assisted with 13 acquisitions in three years to support 10x EBITDA growth
Bollington Wilson – became the largest independent broker in the North of England during Inflexion’s investment
Acorn Group – created a data science team which is having real impact
UK-wide corporate insurance broker DR&P Group Limited built a network of strategically aligned businesses in the regional insurance broking market with Inflexion’s support.
DR&P sells (and distributes via specialist MGAs) a wide range of non-discretionary commercial insurance products across a diverse range of end-markets. DR&P traces its roots to 1977, with the Inflexion partnership a time of tremendous growth that included 13 acquisitions in three years.
In 2024 Inflexion agreed the sale of DR&P to BMS Group, an independent specialist insurance and reinsurance broker,. At the time of exit, DR&P had a team of almost 400 people in 25 offices across the UK and Europe, handling in excess of £620 million of gross written premiums for their clients. In addition to its impressive M&A run, DR&P’s success was underpinned by a 95% client retention rate and significant investment in its technology infrastructure, with Inflexion’s investment helping it pivot from UK-only to having an active client list spanning and 46 countries. The 13 acquisitions alongside industry-leading organic growth of 23% generated a 10x increase in EBITDA and 4x growth in headcount.
In 2017, Inflexion backed the buyout and simultaneous merger of Bollington Insurance Brokers and F Wilsons Insurance Brokers to create Bollington Wilson Group. Five additional acquisitions helped to deliver EBITDA growth of 133% and in 2021, the company was sold to one of the UK's leading independent insurance brokers, US-listed Arthur J. Gallagher.
The partnership commenced with Inflexion supporting the brokerage businesses to integrate successfully, with the newly created group focused on UK expansion. With a diversified platform in place, attention turned to adding scale and seeking out add-on acquisitions. The businesses continue to trade under their independent brands, building on their heritage and strong reputations.
The Group grew organically and via strategic acquisition during the Inflexion investment, including four purchases in 2020 alone, and became the largest independent broker in the North of England. Its success was about more than just scale; it was about focusing on clients: Inflexion helped to digitally enhance the business and embed customer service excellence.
At the time of the exit, Bollington Wilson was operating across seven offices and employing more than 400 people.
Inflexion Partnership Capital has been working with Acorn Group (formerly Granite Underwriting) since 2018. The specialist motor insurance business has been growing market share organically and through M&A, drawing on Inflexion’s experience in acquisitions whilst retaining control of the business following the minority investment.
The Group comprises a number of brands which distribute specialist motor insurance, with a market leading position in UK taxi insurance as well as specialist cover for private car and light commercial vehicles. Its services are marketed through retail branches, price comparison websites, brokers, its own website and a call centre. Acorn Group's core strength is its data-driven business model, combined with control of the full value chain through underwriting, distribution, claims handling, premium finance, investment management and vehicle hire.
In 2023 Inflexion supported the creation of data science team to help Acorn make the most of the data it has. The initiative commenced with the hiring of a data lead, who was supported by Inflexion’s Data Analyst Jan Beitner. The team is now four-strong and has already delivered solutions for Acorn’s two biggest products, representing c. 70% of income and delivering a c. 10% uplift on profits.
Ambitious businesses can grow faster with the right capital and expertise, with Inflexion’s flexible funding offering minority or majority capital and access to a sizable team to accelerate growth. The Inflexion team has significant experience in supporting the growth of a number of insurance companies, and all have access to Inflexion’s value acceleration strategies of digital enhancement, international expansion, M&A, commercial effectiveness, sustainability and talent management.
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