Regional review: Mersey upbeat

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Despite the lack of insurer offices and recruitment difficulties, brokers in Liverpool are positive about the local market and the North West in general

Mention Liverpool and its two Premier League football clubs or a medley of The Beatles’ greatest hits will most likely spring to mind. 

But according to Liverpudlian brokers there is more to Merseyside than sports and entertainment. The city was historically a centre for insurance and, while most insurers have moved out of Liverpool in the last fifteen years, locals maintain that the broking sector is still very much a force to be reckoned with.

One of the longstanding brokers in Liverpool is Butterworth Spengler. Initially a family business set up by EL Spengler in 1924 and merged with local firm Butterworth’s Insurance Brokers in 2001, it specialises in commercial insurance, professional indemnity and cycle insurance.

Director Andrew Thomson describes the competition within the Liverpool broker market as “healthy”, adding that there is a lot of respect for the brokers in the city. “A lot of them have been here for a long time like we have,” he notes. “There are not a lot of new starters in the area.”

Despite the competitive nature of the market, Mason Owen Financial Services managing director Andrew Gibbons declares that local brokers are “reasonably friendly”.

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“It’s a fairly loyal market, the clients are loyal to the brokers and the brokers are usually fairly comfortable with each other’s existence,” he continues. “It’s much less cut-throat than in Manchester where there are a lot fewer brokers. And for a long time the consolidators didn’t come into Liverpool, it was almost like the forgotten place.”

Mason Owen, also a family owned business, started as a property company and has had a presence in Liverpool for 50 years. The insurance broking part of the firm was established in 1988 with a clear focus on property insurance. Over the years its insurance specialisms have been expanded to include property owners and investors, high net worth, construction and legal indemnity. 

Distinct city

Much like London, Liverpool has a distinct financial district and most of the local brokers’ offices can be found within a short walk from each other.

When asked about the characteristics of the city, the words most frequently used by brokers to describe it are vibrant and friendly. Another adjective associated with Liverpool is proud.

“It’s been through testing times in the last ten years, but you can see a distinct development and improvement within this city due to investment in the retail and leisure sector,” says Danny Nield, account executive at Kingsbridge Insurance Brokers. “It is a very proud city. You get that sense of self achievement when things go well. There are a lot of events around which are well populated by the local people.”

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Kingsbridge was set up 15 years ago following a management buyout by CEO Steve Wynne, who previously worked at JLT. Nield describes the business as a niche insurance broker specialising in the insolvency sector, water companies, utilities, recruitment, umbrella companies and quarries. 

“Liverpool is a city, but more like a village,” Thomson adds. “Everybody knows each other and there’s a community feel. If you invest time in the city it tends to repay you for the work you put in.”

Located by the water, Liverpool used to be an important market for marine insurance and the docks still play a big part in bringing jobs and tourism to the city. However, brokers in the area explain that most marine insurance policies are nowadays written in London. There is no single specific insurance specialism that dominates the region.

Nield lists that the science and technology sector, born out of the city’s universities, is currently an area of “particular success and development” in Liverpool. Others have seen new opportunities arising from the construction work going on around the city, which has attracted new people and businesses to Liverpool, as well as a growing tourism and entertainment sector.

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Location, location, location

Most of the brokers name Liverpool’s location as one of its main advantages. “It’s easy to access the whole of the UK from the North West,” says Charles Hurst, director at Stackhouse Poland. “And Liverpool is a lovely place to work, it’s a thriving community with real value and there is a traditional heritage.”

Stackhouse Poland, which specialises in property, high net worth and the charity sector, entered the Liverpool market in 2014 after buying local broker Coulter Hurst, a company which had been trading in the city for 15 years.

The broker has nine offices, but Hurst notes that this is the only one in the North of England and that he is keen to grow its presence in the region, using Liverpool as a base. 

Another advantage of Liverpool is lower costs, according to Gibbons. “In general rents are cheaper than London and very much cheaper than Manchester,” he states. “And you can employ good quality people at a reasonable salary.”

However, he also highlights that the disadvantage of Liverpool is that it is “no longer a recognised insurance market in the sense that Manchester is”. 

“It’s a shame because it has a tremendous history of insurance through the companies that were here,” Gibbons continues. “I think you’ll find many businesses in other parts of the country have got more of a problem with over-broked and under-priced markets and constant churn of business. We don’t seem to have as much of an issue with those sorts of things.”

Construction and investment
According to insurance experts in the Liverpool market the area has been on the up for quite a while and is set for even more progress.

“The last two decades there has been an enormous amount of investment and that continues to bring to the city a lot of money, a lot of job opportunities,” says Tracey Threlfall, Aviva’s head of trading for the North of England. “If you look at things like the Mersey Gateway, which is the new bridge that is being built, that will massively help the infrastructure and transport in and out of Liverpool.”

Further projects that local brokers say have attracted new clients to the area include the development of Liverpool One, the largest open air shopping centre in the UK, which opened in 2008 to coincide with Liverpool’s year as European Capital of Culture.

Others mention Liverpool2, which will be the UK’s most central deep water container terminal and is set to open this year, bringing additional opportunities in the transportation and logistics sector to the region.

“There is a lot going on in this city,” says Andrew Gibbons, managing director at Mason Owen Financial Services. “Because of its history Liverpool has a platform to continue to develop as a destination place. For businesses, if income is coming into the city from tourism, that gives us an opportunity in selling our worth to more clients. The future is positive.”

Aviva is now the only provider that still has a presence in Liverpool after the other insurers centralised and moved their focus to London and Manchester. 

According to Tracey Threlfall, Aviva’s head of trading for the North of England, Liverpool is still a “substantial part” of the region and at the moment the insurer has no plans to close the office. Aviva has, within its various legacy companies, been in Liverpool for over 200 years and used to view the city as its own region, separate from Manchester.

Threlfall explains that being the only insurer remaining gives Aviva a positive advantage over the others, adding that most of the brokers in the area are regional independent brokers which “want to support the local market and place business with an insurer who has invested in Liverpool”.

“There has not been a lot of consolidation here at all,” she adds. “Customer relationships are really important to brokers here and that fits perfectly with our strategy of being close to the customer.” 

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Most of the Liverpudlian brokers maintain that while they do sometimes miss having the option to pop out for a quick coffee with an insurer, a majority of insurance companies have offices in nearby Manchester and are frequent visitors to the Liverpool area.

“Insurers serve the market as best they can and each of them spends quality time in Liverpool,” says Phil Angus, head of Marsh’s Liverpool office. “Part of our role as brokers in the Liverpool region is making sure that they keep Liverpool on their radar and being able to articulate the risk profiles appropriately.”

Hurst adds: “What we say as a broker is that geography should never be an issue and you go where you need to be, either by getting in a car or having an office. That’s probably how the insurers look at it as well.” 

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The overall view among brokers seems to be that modern technology allows them to have strong relationships with insurers regardless of where they are based.

But while most brokers claim that they do not find the lack of locally based insurers to be a major issue when it comes to relationships and trading, there is one area where it has caused perhaps the biggest problem they face within the Liverpool market – the absence of experienced staff to recruit.

“Usually brokers will tend to feed in from insurance companies when they hire new staff, and most insurance brokers have had insurance company experience,” explains Nield. “So unless they’ve been working in Manchester in the insurance sector then we are struggling and I think that will be an issue for Liverpool going forward.”

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Respectful recruitment

In addition, Phil Coffey, director at Butterworth Spengler, says the local brokers respect each other’s businesses and don’t set out to poach staff from their competition. He adds that because of the lack of talent from insurers, Butterworth Spengler has thought of another way to recruit new employees.

“We’ve had an apprenticeship programme for about 18 months now and we see that as potentially where we’ll move forward,” Coffey explains.

Speaking to local brokers it becomes clear that taking on apprentices is a popular way of dealing with the problem as it allows them to train their own staff. Another alternative has been to look for employees in other sectors. 

Meanwhile Angus, who was behind the opening of Marsh’s Liverpool office in 2012, says he aims to recruit employees from outside of the region. “Ideally from our perspective we’re looking at attracting in talent from the wider UK that’s looking to return to the Liverpool city region rather than going after the competition,” he adds.

Looking ahead, local insurance specialists are certain that Liverpool has a bright future, once again pointing to the investment going into the city. “There is a lot of opportunity both for new and existing clients and we’ve seen it more in the last 12 to 18 months,” says Butterworth Spengler’s Thomson. “The local economy has picked up a little bit and people are having a better time with it. That has obviously helped us and helped the insurance industry as a whole.”

 

A global view
Phil Angus, head of Marsh’s Liverpool office, claims that Marsh is the only multi-national broker set up in Liverpool. The company established its Liverpool office in June 2012, after Angus identified the city as having “a lot of potential in the future”.

“We are the only one of the big three that have set up here, which is obviously to our advantage at the moment, because there is that lack of international competition,” he notes. “And we’re finding that we’re actually being serviced outside of the city. It’s a very vibrant broking community and city. And it’s a very exciting time to be in a growing financial district.”

He further states that while the likelihood of the composite insurers coming back to Liverpool is “quite slim”, he hopes to see more activity in the broker market going forward.

“There are more advantages of being in Liverpool than of not being in Liverpool, because it’s one of the major super cities in the UK,” Angus adds. “It’s only right for Marsh to have it included in its UK footprint. The fact that we’ve had a successful three years just goes to show that it was the correct decision to open the office.”

 

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