Lucas Fettes and Partners: 200 staff and accounting.

Lucas Fettes and Partners is a well-regarded broker founded on recommendations from accountants. For example, it has a strong association with the accountant Baker Tilly.

Lucas explains: "If you cold canvas you win one in twenty, however, if you have a warm lead from an accountant, you will win one in two."

The business, which had its second most profitable 12 months last year, was founded when director David Fettes and Robin Lucas joined forces. Lucas says the first 18 months were extremely hard but after five years realised they had created something "worth having". He attributes the success to the professional staff. He says: "It is important to offer incentives for staff." A total of 30% of profit is given back to staff.

Set-up in London, LF&P entered the Manchester market in 1988 through buying a financial services operation. Then, in late 2001, LF&P bought Sale-based broker Chatburn and Company, which controlled £5.5m of gross written premium; it now has £10m of mainly commercial business and staff numbers have increased from 26 to 49.

David Lee was recruited to run the general insurance side of the operation, and set-up a wholesale contractors and liability book of business which services over 200 brokers. There are around five underwriters from the Lloyd's and London market, including Brit on the liability side.

Since then LF&P has expanded, with branches having their own managing directors; altogether there are 21 directors.

There is a comprehensive training regime, and a six strong compliance team headed by company secretary Mark Brown.

A total of two-thirds of L&FP's premium income is general insurance, while the remaining third is life insurance.

It specialises in media and entertainment, and handles property insurance for buildings valued at around £3bn. A total of 20% of its business is professional indemnity for clients with occupations such as accountants, solicitors, estate agents, surveyors, architects and business entrepreneurs.

There are relationships with a wide range of insurers, and specialist brokers but Lucas feels insurers could improve the accuracy and presentation of documents.

There is also scope for cross-selling - with 20,000 plus clients, and less than 5% on both the financial services and insurance sides.

Lucas has a word of caution for some of the consolidators, he says: "Brokers are too expensive at the moment. There is not enough of a relationship between profitability and what is being paid."

He adds: "If everything (insurance premiums) is going between two-thirds and half price and, therefore, income is falling, then the pot that insurers have to pay for claims post commissions is shrinking. This means commission will come under scrutiny and this will put pressure on."

However, Lucas does not rule out acquisitions for his own firm. He says: "We could turn around a small marginal brokerage with a good reputation, which could then bring in a flood of introductions."

Despite Lucas's reservation about buying in today's market, he is convinced that size is important. He says: "We need a certain flow to gain premier status amongst insurers and command respect in the market. We want to double the size of the business within the next three to five years, through acquisition, organic growth and attracting teams."

Lucas sees recruiting teams as paramount to the firm's success. For example, earlier this year, six staff joined from rival broker Berry, Birch and Noble for its Manchester financial services operation. Lucas is also considering opening offices in Birmingham and in Scotland.

Lucas believes the industry is over-regulated, but welcomes reforms to make it more professional. He says: "I'm amazed when we look at brokerages, and how many did not have a client money account or had problems with it."

Meanwhile, LF&P, which has been self-financed, has invested £500,000 in information technology and uses Insurecom TAM for its general insurance.

LF&P celebrated its 25th anniversary on the HMS Warrior, which it insures, and has invested in a new corporate identity showing its determination to keep pushing the business forward.

LUCAS FETTES AND PARTNERS

Managing director: Robin Lucas

Established: 1980

Number of offices: Seven

Locations: London, Norwich, Manchester, Isle of Wight, Berkhamsted, Chichester and Bristol

Number of staff: 200

Lines of business: Corporate

Gross premium income: £45m.