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Newman and Pearce to launch broking start-up

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Newman Martin Buchan founder Gordon Newman has teamed up with former Bishopsgate colleague Neil Pearce to collaborate on the launch of an eponymous broker, The Insurance Insider can reveal.

The venture is to launch officially next month under the brand Newman Pearce, according to sources, and focus on UK and international wholesale business.

It will be incubated by Crispin Speers & Partners (CSP) in an "umbrella"-style arrangement and is registered as an appointed representative of CSP with the Financial Conduct Authority.

Sources said that James Blacker, formerly managing director of P&C at Ed Broking, is to join the new operation in October.

The business will launch as the two-year wave of consolidation in London broking has given rise to a clutch of start-ups, which are looking to trade on their status as challengers to the dominant intermediaries.

Industry heavyweight Newman is best known as a co-founder of Newman Martin Buchan, which sold to Cooper Gay in 2013 in a deal worth around £40mn ($49.7mn).

Newman worked for Ardonagh Group for around two years, first joining as executive chairman of Bishopsgate before becoming leader of the group’s specialty operations. He left at the end of 2018.

On joining Ardonagh in 2016, Newman said broker consolidation in London had eroded choice and that he planned to “address a real gap in the market, with a focus on customer-centric, bespoke service”.

Pearce joined Bishopsgate as CEO in August 2016, having previously been a managing director at Windsor Insurance for 19 years. He has spent more than 30 years working in Lloyd’s broking, including a stint as executive director at SBJ Marine and Energy.

Pearce announced in May that he would leave the business this month, to be replaced by Jonathan Turnbull, previously CFO of specialty at Bishopsgate.

Newman Pearce will open its doors at a point in which the broking sector is in flux.

Valuations of broking businesses are high as private equity and pension fund interest in the sector has remained strong.

This interest in fee businesses has funded a wave of consolidation in the market as investors look to bring similar businesses together with a view to realising efficiencies and ultimately selling them on at a higher multiple.

At the same time, players are now emerging who are keen to cash in on concerns over the concentration of power in the hands of ever-fewer brokers. These have become more acute since Marsh & McLennan Companies’ (MMC) takeover of JLT.

Continued intense M&A activity, particularly the MMC-JLT deal, has loosened some key personnel’s commitment to their firms, creating a wave of staff turnover across the sector.

This has sparked fierce competition for top producers and even entire teams, and provided the chance for opportunistic firms to play the dislocation in order to access talent.

The launch of a new wholesaler also comes at a pivotal moment for distribution and access to Lloyd’s.

The Corporation is to set out its blueprint for future reform this month. Previous suggestions from CEO John Neal that Lloyd’s would allow retail brokers to access the market have raised questions about the possible disintermediation of wholesalers.

Neal has reassured the market that wholesale brokers will always have a role but urged them to adapt to faster and more streamlined trading.

Newman Pearce will be the second significant start-up this year, following on from former Aon president Steve McGill’s venture, which launched in May with $250mn in funding from Warburg Pincus.

Meanwhile, Nasdaq-listed financial services firm BGC has doubled down on its London market broking play with the purchase of Ed to complement its existing broker Besso, which closed in February. It has since set about challenging the big three with key hires in certain specialties such as aviation.

Newman Pearce and Crispin Speers did not respond to requests for comment. Ed declined to comment.

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