Few opportunities with regulation

Although it is predicted that regulation by the Financial Services Authority will change the UK market significantly with broker consolidation, we do not currently see great opportunities to acquire new business as the pricing levels are thought to be unrealistically high.

With around 90% of its business in reinsurance and wholesale and approximately 10% in niche retail insurance, Cooper Gay has grown dramatically in the last 10 years, mainly through organic growth and the creation of oversees offices.

In the UK we will look to take on more quality individuals and teams from other broking houses. CG is still privately owned and is ideal for people who want to be involved in the running of the business.

Around 50% of CG's business comes from the UK. Lloyd's has modernised significantly in recent years and it is a far more professional market.

However, we have moved more towards 'big is beautiful' with fewer but larger and more powerful syndicates. It has become less of a market place, which is a shame. Also, there is not the same training ground for underwriting, which has become more manual, and some of the entrepreneurial spirit has been lost.

There is concern about the chance of another incident of the type that occurred in the US on 11 September 2001, with massive industry losses.

However, there are some substantial differences. Most of the businesses in the World Trade Center and the surrounding hotels had terrorism cover.

Today, the amount of terrorism cover purchased is limited owing to the fact that it is relatively expensive. So, the covered insurance loss would not be as huge. In September 2001 the market was in the process of hardening and the attacks pushed the hardening way over the edge. We are now in a market that is softening, thus the exposure to the industry is different.

Fewer players mean that, in future, the insurance cycles will be faster.

There is a huge amount of capital tied up in a small number of players that are able to analyse their results quickly so the supply and demand of capital is quicker. We are currently in a transitional market - long-tail business is continuing to harden or level off and short-tail business has already come down. The cycle will be much quicker this time round.