Regional review: Northern powerhouse

Leeds town hall

With a vibrant independent broker market and strong presence from nationals and insurers, Leeds is going from strength to strength

“Leeds is the centre of the universe,” says JM Glendinning group managing director Nick Houghton with a smile. “And certainly the centre of England and Scotland.”

Houghton explains that the city is the ideal place to be based because of its geographic location and transport links to other major cities in the UK, adding that it enables the broker to see every customer face-to-face if that is their wish.

JM Glendinning was founded in November 1972 by John and Joan Glendinning from the back bedroom of their house in Otley, just outside of Leeds. The business now has five offices and employs 83 people in its broking division. According to Houghton the firm’s gross written premium (GWP) is £30m. 

Local brokers describe Leeds as a vibrant and growing city, with strong financial services and legal sectors, as well as a focus on construction, retail, property and leisure. In addition, experts note that Leeds was traditionally very industrial and has a manufacturing heritage. It also has a growing technology sector, and local universities bringing both talent and business to the city.

Simon Mabb
There are a lot of brokers in Leeds and out of those there are many that are new business focused, so it’s quite an active market
Simon Mabb

Positive outlook

“The positives of Leeds are that we’re right on the cusp of some fantastic countryside and great places to live as well as having all the amenities of a city,” observes Romero Insurance Brokers managing director Simon Mabb.

Romero, which has a GWP of £75m and was established in 1997, has 100 staff based in its Leeds office.

Mabb describes the local insurance market as “very competitive”, stating: “There are a lot of brokers in Leeds and out of those there are many that are new business focused, so it’s quite an active market.”

The specialists further highlight that business in the area is healthy, adding that brokers coexist and have respect for each other’s businesses. 

“There’s plenty of business for brokers around here,” states Lockyers principal Jon Newall. “Up here we all know each other and go out for a drink together.”

Newall bought Lockyers, which specialises in leisure, property owners and special risks, in 2000 and the company now employs 15 staff and has a GWP of £6m. 

He points out that the local insurance market is “aggressive and ever-changing”, highlighting a lot of consolidation activity as well as new managing general agents (MGA) setting up in the area.

However, he notes: “Yorkshire is an easy place to do business and we’ve got a loyal client base. Everyone likes to do business face-to-face.”

Jon Newall
Yorkshire is an easy place to do business and we’ve got a loyal client base. Everyone likes to do business face-to-face
Jon Newall

National presence

While it is clear that Leeds has a strong set of regional independent brokers, most of the bigger national brokers also have hubs in the city. 

One of them is Towergate Insurance Brokers, and area director John Simpson explains that the first Leeds-based business to be purchased by the consolidator back in the 1990s, Smithson Mason Group, was established over a century ago.

“The core of the business and the commercial book here probably dates back a hundred years,” he adds, detailing that the broker currently employs 80 staff in Leeds.

According to Simpson, Towergate’s Leeds office is a “typical regional broker”, which covers a lot of mobile crane hire companies and traveling showmen, in addition to more general business.

Transport trouble

Simpson says that Leeds is vibrant, however, he states: “We suffer generally from the London effect where investment tends to get attracted there at the cost of the regions.”

In his view Leeds has the opportunity to be at the heart of the northern powerhouse: “I’d love to see the northern cities be a little bit more connected transport wise.”

Several of the other brokers agree that one of the biggest challenges of being based in Leeds is transportation, with all of them looking forward to HS2, the planned high-speed railway linking London, Birmingham, the East Midlands, Leeds and Manchester.

When asked about the local economy, all agree that it is steadily improving, with new developments on the horizon.

Craig Dickinson, North East regional manager at RSA, believes that the economy is “definitely on the up”. He sees that all sectors are doing well “against the backdrop of the challenges the UK is facing at the moment”.

Mabb explains that when the recession hit 10 years ago all construction stopped: “Leeds was quite up and coming so things started to flat line, but it’s on the up now and there are a lot of new developments in the area.”

He does though flag one particular concern related to the airport which is next to Romero’s office.

“Monarch is based just across the road and just laid off a lot of people,” Mabb recounts. “They were the third largest carrier coming in and out of the regional airport here so that will have an impact locally.”

Despite the positive sentiment on the local economy, the majority of brokers highlight that while most insurers have a presence in Leeds, many of them have downsized their local offices and moved functions elsewhere. This has impacted on the ability of providers to deepen relationships with the brokers in the area. 

“It’s fine because we can still get the trading done, but we don’t get that full end-to-end solution,” Mabb observes. “It has impacted our relationships with them at a certain level because things have become fragmented.” 

John Simpson
We suffer generally from the London effect where investment tends to get attracted there at the cost of the regions… I’d love to see the northern cities be a little bit more connected transport wise
John Simpson

Top talent

Another challenge in Leeds is the recruitment of quality staff, with Newall describing the market for employees as “cut-throat”.

However, Simpson maintains that the local brokers have access to a “really good talent bank” thanks to the city’s financial focus.

“We’ve got a strong university sector and because of the strong financial services in Leeds it attracts people that are interested in financial services as a career,” he continues. 

Others agree, going as far as to say that recruiting is relatively easy at the moment, but that comes with a caveat. The shared wisdom is it will become increasingly difficult as a result of the insurers shrinking their offices in the city.

“There’s not as many coming from the insurers so they aren’t coming to the brokers highly trained and moving forward,” says Mabb.

Lee Mooney
A lot of people talk about Leeds as a second city to Manchester and it’s not… One of the great benefits of Leeds is it’s autonomous – it has got its own industry and its own economy and its own businesses
Lee Mooney

Local rivals

While the city is located relatively close to another centre for insurance – Manchester – there are mixed views among the local brokers about whether this has an impact on the Leeds insurance market. Most of them note that the two cities coexist well and that there is no major competition going on between them.

“There’s a great set of hills in between that no one seems to want to cross,” Newall continues. “We’ve got very few clients in Manchester and over here we come across very few Manchester brokers.” 

However, Simpson states that
Leeds is “losing out a little bit” to Manchester, adding that many of the insurer offices in Leeds are spokes of their Manchester hubs.

“It’s really important that the broking community supports the Leeds offices to keep that community vibrant,” he observes. 

“I wouldn’t want to see Leeds having to broke everything into Manchester. It’s such a relationship-driven market and great that we have the insurers on our doorstep. We need to look after them.” 

Accordingly, RSA director for regions and SME for North Lee Mooney echoes the positive statements about Leeds as an insurance market. He argues that “a lot of people talk about Leeds as a second city to Manchester and it’s not”. 

Explaining: “One of the great benefits of Leeds is it’s autonomous – it has got its own industry and its own economy and its own businesses.”

The future, as predicted by our panel, is bright for Leeds, with plenty of opportunities for local brokers and more investment being made into the city. But only if the right steps continue to be taken.

“We should keep investing in Leeds and keep attracting the best people, because otherwise they’ll go elsewhere,” Houghton concludes.

Nick Houghton
We should keep investing in Leeds and keep attracting the best people, because otherwise they’ll go elsewhere
Nick Houghton

The insurer view

Most of the big insurance companies have offices in Leeds. 

RSA has had a presence in the city in some shape or form “going back to when the market started”, confirms North East regional manager Craig Dickinson. 

The provider currently has a core team of 10 underwriters based in its Leeds office and is prepared to bring in specialist underwriters to tackle specific broker needs.

He describes the local broker market as “widespread and diverse”, adding: “You’ve got everyone you would expect to see here from the globals to the nationals, consolidators and networks, and Leeds has also got a strong regional independent broker presence.”

The director for regions and SME for North at RSA, Lee Mooney, suggests that a “strong element” of the broker market in Leeds is that they use the insurers that have a presence in the city.

“In some other locations where we have a presence there isn’t that strong broker push towards that presence,” he continues.

“We’re only here because the brokers want us to be here. There’s always that school of thought that if you don’t use us then we’ll go somewhere else, but we’ll never have that problem with Leeds.”

According to Mooney the broker market in Leeds has some “real strong characters” that have been present in the city for decades.

He concludes: “They’re what made the fabric of the insurance industry here – it’s the individuals within it.”

Craig Dickinson
You’ve got everyone you would expect to see here from the globals to the nationals, consolidators and networks, and Leeds has also got a strong regional independent broker presence
Craig Dickinson

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