Entente cordiale

Alec Finch is in his element. He is in Prague at a rather exclusive hotel in his final stint as chairman of the Worldwide Broker Network, which utilises the resources of brokers across the world in order to bring a truly international proposition to clients. It has been a runaway success story and Finch's brokerage, with bases in Halifax, Manchester and London, was a founding member of the organisation back in 1989.

The Worldwide Broker Network has grown exponentially and in Prague, at one of its regular gatherings across the world, Finch is surrounded by brokers of some clout hailing from Africa to Asia. He claims there are broker members from 50 countries that employ more than 30,000 people between them. Its areas of expertise are property and casualty, risk management consulting, life and pensions advice and employee benefits consultancy. Aberdeen-based Central and Lloyd's broker Price Forbes are Finch's fellow representatives from the United Kingdom.

Finch is a jetsetter. This year he has been to China, the US and South Africa and is fortunate enough to be able to mix business with pleasure on many of these occasions. On a more local basis he adds miles to his yearly total by taking regular chartered planes to see his counterparts in France. He has embraced global opportunities and can boast that around 30% of his business is now international.

Trading with middle and upper-middle strata corporate clients means that Finch has developed the resources to serve these clients by handling both incoming and outgoing international business. Although Finch will not reveal his client base, he is happy to do business without coming across a vast array of potential competitors. He says: "It (the focus on corporate clients) allows us to work in an interesting space away from the intensely competitive so-called SME market." This is reflected in gross written premium of over £50m, which includes a book of private clients.

Change

With retirement at the back of his mind, Finch secured his firm's long-term future in January by selling his 100% stake to Quimper-based Verlingue.

Having seen numerous changes in the industry over the last thirty years, Finch was certain he did not want his business to end up in the hands of a consolidator. Instead, he saw that the most sympathetic option for his succession would be to align his business with one he perceives as a traditional, family-run affair.

In addition to joining the Worldwide Broker Network and Unitas, significant events at AFG include gaining Lloyd's accreditation in 2003 and a brush with consolidation when he sold his firm's £6m professional indemnity book to Towergate. In May 2005 the Alec Finch Group acquired Oakley Financial Solutions, a Manchester-based independent financial adviser that focuses on employee benefits which amounts to 20% of Finch's revenues. Finch wants to grow this significantly concentrating on corporate clients and to grow it to around 40% of the revenue stream. Verlingue's business mix is already 50% insurance and 50% employee benefits. In the same year Finch set up a specialist personal lines division called Alec Finch Private Clients which caters for high net worth individuals.

Jacques Verlingue and Finch have known each other for 15 years and Verlingue, himself a former Worldwide Broker Network chairman, is a member of the French broker alliance, Groupe Force, which provided the model for Unitas. The network, of which Finch is a former chairman, was formed at the end of 1997 and includes brokers such as Perkins Slade, TL Dallas and Thomas Carroll. It controls premiums of around £300m although consolidation has led to two brokers leaving recently, including Bristol-based John Lampier & Son - which has been acquired by local rival the Jelf Group.

Finch, who established AFG after a management buyout of the provincial operations of Lloyd's broker Golding Collins in 1983, says he has possibly two years left before retiring, but adds that his venture with longstanding friend Jacques Verlingue is only just beginning. Both brokers have in common a similar family-led philosophy and spirited ambition.

Deal

Explaining why he felt it was the right time to sell, Finch comments: "I was not looking for an exit, but the landscape for the intermediary sector has changed considerably. In order to continue to develop the business along our preferred lines it was abundantly clear that we needed to achieve scale quickly." He continues: "The options were to buy, merge or sell. With my 60th birthday approaching the idea of taking on debt for the first time and becoming locked-in for another three to five years was not appealing. A deal with another European broker ticked all the boxes, especially one with a corporate property, casualty and employee benefits mix similar to our own."

Axa was announcing the acquisitions of Stuart Alexander and Layton Blackham at the time of the deal. Jonathan Swift, editor of Professional Broking's sister title, Post, wrote in his comment column of 25 January: "Verlingue's deal to buy Alec Finch is potentially just as important a development as that of an insurer buying an independent commercial broker, in that it hints at a fully fledged pan-European intermediary market."

Subject to a confidentiality agreement, the deal was struck after a year of change for AFG that saw pre-tax profits dip and the decision to spin-off its independent financial adviser business and sell a small personal lines book. The reason behind the moves was to allow AFG to concentrate on its staple diet of medium- to large-sized corporate clients.

One of the principle attractions of the deal was that the AFG name could be preserved and that an independent and family-owned broker would back it. Although Finch refuses to reveal the exact terms of the deal, he seems keen to oversee the firm's transformation for at least the next two years: "I am working full-steam ahead and longer hours than previously. My position currently is that of chairman and managing director of AFG, and so my principal role is to ensure a smooth and orderly transition to becoming the UK-end of a genuinely Anglo-French business by 1 January 2009."

Verlingue adds: "Verlingue is dedicated to corporate business and our philosophy is one of client satisfaction, outstanding economic performance and commitment to our employees. This company has the ambition of becoming a genuinely European business and the move into the UK was the first step on that journey." He has an expression that he favours often to express his firm's future growth prospects and how he runs the business: "We don't run; we walk very quickly." Client satisfaction or "la forte culture centree sur la satisfaction du client" is at the heart of Verlingue's business philosophy. He is determined not to allow growth to dampen this approach.

Verlingue is quite unusual as an independent broker in a French market dominated by tied agents and mutuals. It is the tenth largest independent in France, with six offices in Quimper, Nantes, Paris, Mulhouse, Strasbourg and Lille. AFG represented Verlingue's first foray into territory outside France and the company now controls a combined total of approximately £400m in gross written premium and a staff of more than 650.

Surprisingly, Verlingue believes there is little difference between France and the UK: "(They are) very similar except for Lloyd's and the Financial Services Authority." In a jocular manner he also points to the cultural disparities in the two countries' languages and senses of humour.

Learning curve

The integration of the two businesses has been labelled as the Synergy Project. The first six months post-transaction have been spent learning about both businesses and the differences between the UK and French markets. The results of the fact-find were formalised into a presentation given to staff in July. Phase two of the project has seen the creation of 14 working groups, with employees from both countries looking at how to take advantage of the newly-merged pool of skills, experience and practices now available in sales, technical, IT, human resources and compliance.

Important decisions have already been made, such as leading the international business from the UK and Verlingue's sales model being implemented here. The goal is 15% of mainly organic growth a year that will then be supplemented by acquisitions as of 2009.

Despite the departure of the company's London office head, Richard Wise, who has taken up an underwriting position at London-based Oxygen, Finch believes the business is running smoothly and describes staff turnover as "unexceptional". AFG has since made five appointments, including Paula Williams, who joined from Jardine Lloyd Thompson, to lead the property and casualty team in Manchester.

Finch is nearing the end of a distinguished career but remains enthusiastic: "The biggest thrill is winning a new client, no matter how big or small. It never fades; ask the guys in my office!"

Revealing his finest achievement, he beams: "Having decided in 1988 that we needed an international presence, setting out to create the Worldwide Broker Network has given most satisfaction as it is now the world's biggest network of independent brokers with members in over 50 countries that employ more than 30,000 people."

Finch's goal now is to ensure his firm moves on from a transitional period to maintain long-term growth and create a "genuine" Anglo-French business by January 2009 with the help of his friend Jacques.

Read January's new look PB for a roundtable hosted by PB's editor Andrew Tjaardstra at the Worldwide Broker Network Forum in Prague, which drew broker managers from across Europe to discuss regulation, international cross-selling and the state of Europe's broker markets.

CV - ALEC FINCH

2005: Chairman, Worldwide Broker Network

1995: Chairman, Alec Finch Group

1993-96: Chairman, WBN

1975: Director - Non-marine division, Golding Collins, Lloyd's Brokers

1965: CT Bowring & Co. (Insurances), latterly Lowndes Bowring and then Lowndes Lambert

1987: Yorkshire Insurance Company

CV - JACQUES VERLINGUE

2005: Board member, Council of Insurance Agents and Brokers

2002: Chairman, Worldwide Broker Network and joined the CIAB

1995: Vice-president, WBN

1994: President and CEO, Verlingue

1994: Executive committee member, WBN

1990: Joined the Worldwide Broker Network

1981: Head of business development, Verlingue.