One broker, four systems: what consolidation leaves in the back office

Acquisitions in UK broking are usually justified on the front end. Client relationships, a book in a line you wanted, a team with a reputation, a region where you were thin.

The back end rarely features in the rationale, and it is where the cost turns up.

What actually gets inherited

Buy three brokers over four years and you do not have one business with three offices. You have one business running three ways of recording a client, three ways of calculating commission, three sets of document templates, three renewal processes and, very often, three separate systems that were each the right answer for the firm that chose it.

Nobody decided this. It accumulates. And because each individual system works well enough for the people using it every day, there is never an obvious moment where it breaks. It just gets quietly more expensive.

The costs show up in specific places. Group reporting takes weeks rather than days because the numbers have to be normalised before they can be added up. Cross-selling between acquired books is difficult because nobody can see the whole client. Commission reconciliation happens three different ways. Compliance evidence has to be assembled per entity rather than produced once. And when someone leaves, their knowledge of their particular system leaves with them.

The convergence project nobody scheduled

Most groups know this and plan to fix it. The plan is usually to standardise on one of the inherited systems, typically the largest firm’s, after the current wave of integration work is finished.

Two things tend to happen instead.

The chosen system was selected by a business that no longer resembles the group. It fitted a single-office regional broker and now has to carry a multi-entity group with different lines and, increasingly, business outside the home market.

And the project keeps getting deferred, because it never competes well against revenue-generating work in a quarterly planning meeting. Meanwhile each new acquisition adds a fourth way of doing things, and the cost of eventually converging goes up rather than down.

The questions worth asking before the next deal

Not whether to converge, but on what basis.

Is the target system organised around the client and the cover, or around individual policy documents? A group that cannot see a whole client across entities will keep paying for that in lost cross-sell.

Can it hold more than one entity, currency and regulatory regime without a separate instance for each? This is the question that decides whether your next acquisition is an onboarding or another project.

Does it produce compliance evidence as a by-product of normal work, or does evidence have to be assembled when someone asks? The second answer is fine until an audit lands in a month when you are already busy.

And what does migration actually involve for a book with history, live renewals and commission owed? Anybody willing to quote that without looking at your data is quoting something else.

Where we come into it

tigerlab builds a broker management system organised around the client and the cover rather than around a policy document, with client premium, insurer payable, commission and insurance tax posted per booking and per jurisdiction. It is built for multi-entity, multi-currency operations, which is the specific problem a consolidating group has and a single-office broker does not.

Migration is scoped per customer as part of onboarding. We have no interest in quoting a timeline for a book we have not seen, and we would treat any vendor who does with some caution.

Where is your own system sprawl costing you? Download The integration audit: nine questions for brokers running more than one back office, covering reporting, commission, compliance evidence and what the next acquisition would cost to absorb.