Source www.trendwatch.co.uk 1 September 2004

January 14 2005 is a date that will soon be engraved on the hearts of anyone managing or owning any insurance company, large or small. On that day, almost all general insurance companies, including insurance brokers, will be regulated by the FSA.

Trendwatch publications is, of course, also regulated by the FSA. As a media business, compliance with the massive FSA rule book is considerably less onerous than it is for business that hold client money for investment or insurance purposes. Even so, grappling with the FSA can be like mud wrestling a multi-headed hydra.

To give one small examplee, we recently found out that, to add letters Ltd after ourname )no other changes to the business whatsoever) requires the completion of between 50 and 60 pages of forms and the preparation of much other supporting documentation. The FSA will not even deign to look at it unless it is accompanied by a cheque for 1,500. If everything then seems to be in order, the FSA undertakes to deal with the matter within 6 months.

If, in our infinte naivete, we had failed to realise this palava was a legal requirement, the MOther of All Parliaments has decreed that we would be committing a criminal offence, and liable to be detained at Her Majesty's pleasure at a house of correction and her learned judge's choosing.

This is what the FSA regards as'light touch' regulation which minimises disruption and cost ot businesses.

Now imagine how tricky things can get if you attempt something really complicated such as taking on a member of staff.

The FSA estimates that it already has about 10,000 in the mortgage and general insurance field by the short and curlies. It estimates that at least another 10,000 business will be dragged kicking and screaming into the brave new world of 'light touch' regulation. Around 2,500 insurance brokers will be lightly touched by the FSA on January 14.

But, as everything in life, one mans Kafkaesque nightmare is another man's business opportunity. Which brings us to Broker Network Holdings (BNH)

BNH floated on AIM as recently as May this year (raising 2m in the process), so most investors will know little about it, if indeed they've heard of it atall. We're recommending it because we feel that burgeoning profitability will soon make it a lot better known.

As the name suggests, BNH exists to build a network of independent insurance brokers, all operating within the BNH framework. This follows a path wellbeaten by IFA's, accountants and dentists. BNH is the longest established player in its field and believes that it has a stronghead-start, and a great deal more credibility than other 'me too' imitators.

The system works like this: as an independent insurance broker, you undertake to pay 95 a month to BNH. You also undertake to pass all your insurance business premiums through BNH. BNH places the insurance business with the giants such as AXA, Norwich Union, Royal and Sun Alliance and Cornhill. The members receive enhanced commission from the insurance companies because of the preferential status granted to BNH. Since BNH deals with the placing of the insurance, this greatly reduces the credit risk of the individual members.

BNH takes 1.5% of the premiums from its members and, in return, provides members with a number of valuable support services, including access to Lloyds of London, centralised back-office IT support, marketing assistance, access to e-commerce, staff training and development, business management and monitoring... and FSA compleance support.

BNH is also prepared to purchase broking firms outright where the opportunity presents itself. There are believed to be a large number of small owner-managed brokers where the owner is approaching retirement. For many of them selling theri business to BNH, typically for around 0.3m, rather than grappling with the FSA, is probably an attractive option. So far BNH has acquired 9 such brokers.

Since it was founded in 1994, it has absorbed 133 brokers into its network and plans to acquire about 90 more over the next 5 years. Out of the estimated 19bn paid in insurance premiums in the UK every year, an est 80% is handled by insurance brokers. Most of this goes to through the big brokers, but about 3bn a year (typically commercial rather than personal business) is processed by the 2,500 small so-called 'community brokers' that form the BNH network.

hat represents the extent of BNH's market pond.

At time of floatation, BNH est that no more than 12% of its target broker had aligned itself with any particular network. Clearly there's plenty of scope for growth.

The company is already profitable. Its last full year results were published in July and showed a profit for the principle trading subsidiary - the PLC holding company had not yet been created - of a record 0.77m up rom 0.70m. 27 new members were taken on.

Brewin Dolphin reckons it will make 1.77m this year, rocketing to nearly 3m in 2005-06. If these estimates are correct, it puts BNH on a forward p/e of 6, which is extremely low for the sector, especiallyfor a company whose profits are growing at such a rapid rate

BUY

Legend, how do you think introduction to VAT will affect the price in BNH?

Quite simply, I don't think that VAT will directly affect BNH.

Can't wait until the results though ;-)

Legend,

What's your personal target SP for BNH? Thanks.

Ramu

1.50-2.00 100% for sure.... absolutely no reason why it shouldn't be there..

Broker Network Holdings plc
3 May 2005


Date 3rd May 2005
For Immediate Release


BROKER NETWORK HOLDINGS PLC (AIM:BNH)

COMPLETION OF THE ACQUISITION OF WYNDALE INSURANCE BROKERS


Broker Network Holdings plc ('Broker Network' or 'the Company'), the network
organisation for independent community insurance brokers, is today pleased to
announce the completion of the acquisition of Wyndale Insurance Brokers ('
Wyndale') of Tottington, Bury, Lancashire.

The purchase of Wyndale, which was announced on 1 April 2005, has been completed
following approval by the Financial Services Authority of the change of control
of Wyndale.

This is the eleventh acquisition made by Broker Network since flotation last May
and is in line with the Company's acquisition strategy of purchasing the
businesses of network members whose principals are looking to exit or retire. A
condition of the deal is that the purchase price parameters will remain
confidential. However, the Company confirms that this latest acquisition is
broadly in line with the other ten acquisitions made to date.

Commenting on the acquisition, Grant Ellis, Chief Executive Office of Broker
Network said:

'The acquisition of Wyndales is a classic example of the Broker Network business
model in action. Wyndales were a founder member of the network, joining us in
1995. After a successful ten-year relationship, the principals are nearing
retirement and have concluded that a sale to Broker Network represents an
excellent opportunity for them to exit the business at a fair price. For us, we
are acquiring a quality established business in the Bury market on
earnings-enhancing terms.'


For further information, please contact:

Broker Network

Grant Ellis (CEO)/ Julie Hale (FD) 01423 877833

Teather & Greenwood
Stephen Austin, Corporate Finance
Richard Kirkham, Sales 020 7426 9000

Buchanan Communications
Kelly-Ann French/ Eric Burns 01943 883990


This information is provided by RNS
The company news service from the London Stock Exchange

Thanks ramu... didn't have time to put this on this morning

Yes very bullish...

According to my broker, (who attended the brokers meeting) said that BNH had acquired the brokers lots cheaper than they had budgeted, and also the acquisitions have performed a lot better than expected!!!

I think the results will see this takeoff.

they are just too cheap at this price. All IMHO of course.

Thanks ramu... didn't have time to put this on this morning

Yes very bullish...

According to my broker, (who attended the brokers meeting) said that BNH had acquired the brokers lots cheaper than they had budgeted, and also the acquisitions have performed a lot better than expected!!!

I think the results will see this takeoff.

they are just too cheap at this price. All IMHO of course.

All buys IMHO... perhaps tipped somewhere as it is nearly a year since floatation....

perhaps in ic tomorrow. Haven't looked at shares mag today.

A definate keep imho.

You still in Ramu??

Legend,

Still in with 30k but delay in sp rise is frustrating. Will need funds soon to play other stocks, so hoping for a 25% rise by end May. How many do you hold?

Now then ramu,

Was tipped apparantly in City Confidential today.

I hold now 37k shares. I think minimum 1.50. I am at least holding until results regardless because if you hold aim stocks for a year then you qualify for extra relief on capital gains tax. Plus also, fund managers are restricted to what they can invest in and as soon as they report their final results then that is when interest will start........

I wouldn't have thought there is anything to worry about whatsoever, of course IMHO.

It is up to you, but i am waiting for my price and I am sure to get it. I wouldn't put so much of my money into one thing if i didn't think it was going to make me anything.

The markets at the moment are weak and it is becomming harder to make a quick buck like it used to.... so you might as well stay in here!! ;-)

as i have intimated previously BN should stick to providing a"net work" for brokers....and not buy insurance broking businesses

there is the absence of profit in the operation of an insurance broking business....and, i can tell you, there are substantial ,long tail, professional negligence risks

Anybody out there? Hardly any movement or news on this share.

Hello sir!!

One more acquisition in the pipeline i would hope.... they usually come close to the start of the month.

Still holding as are tnd. Frustrating i know but this is the market for you. I know its not much consolation. They WILL be back I am sure of that ;-)

Buyers around... must be mad to sell at this price.. I think this will shoot very soon up to the results.

MPW,

Were you ever an insurance broker??

I like the look of this one legend but given the state of play in the small caps market i`m not sure wether to have a punt or not.There are some very good profitable companies out there not getting the increase in their share price they and us investors deserve.
DB66

Couldn't agree more. I always pick good value stocks but the last few months has seen them drop back. I was in these at 61p and intend to hold until 1.50. I would think that it wouldn't be long after the results next month (12 july)

The growth in this company is phenomenal. I think its on a p/e of about 6. It will have approx 3-4m cash at results I would think.

If you are a shareholder doughboy, you would have got the recent broker network newsletter. This was very bullish from chief exec and the chairman.

Any sort of buy in will send this baby into orbit. There are not many shares around in this co so it tends to be quite illiquid and moves around on anything. It got tipped by shares mag as a play for 2005 shares of the year - this was at 1.28 in december. there has been no negative news about this whatsoever. It also got tipped a few weeks ago.

It is a must buy imho.

No i`m not a shareholder legend but i think after reading your last comments i am going to be.
Thanks
DB66

legend 290782 your posting 89.......the answer is YES....in fact top of the pops until i jumped out prior to the arrival of the big fool known by others as the FSA

a friend of mine was one of the first brokers to enter the broker network...and he speaks highly of them.

as i have intimated previously in this posting i am not enthusiastic in BN buying insurance brokers. BN should stick to what they know and are good at.. that is being a broker network

if you have any insurance queries or problems just post them

incidently my career in insurance broking was very rewarding indeed....but those days are now gone

Thanks for this MPW.

I very much appreciate your views on here. I totally take your comments on board that Broker Network's core business is its forte and that yes it perhaps should concentrate mainly on this if it wanted guaranteed and secure growth.

However a plus point of the acquisitions could be that acquiring the brokers could well be a good growth strategy for the company. So it looks to shareholders that the company is really trying to grow its business. Do you remember a company called Park Row?? This had the same model for IFA's... it was so successful that it got taken over.

I think BN has been around since 1994, so we are talking about a well established company here. I am interested in your friends take on BN (i.e reliability of the co... etc).

Believe it or not MPW I am a Mortgage Consultant (just passed my fpc exams last week too by the way!!!) and I have the insurance qualification to sell Buildings and Contents for clients. But why would i want to do that when the firm i work for will receive approx 25 commission and I would have to do a Suitability Letter, fill out the application form and all the relevant paperwork... It's just not worthwhile.. So I only advise on one company - Paymentshield. It's quite quick processing and they have a model suitability letter. Ok it may not be the best but at least it is an option for the client.

The FSA are killing us, and now mortgages are regulated by them which is causing me a lot of hassle. I honestly don't know which way this industry is going do you?????!!!!!

I do have to admit that my knowledge of the insurance industry is limited, but I sure as hell know a good value company when I see one.