Future industry in a historic city: York is building a vibrant new economy and, as brokers in the region tell Insurance Age, the outlook is bright
York is certainly a thriving city steeped in cultural and historical heritage. The city was named Ebocarum by the Romans and is surrounded by impressive medieval walls.
These days the walls don’t stop tourists surging to visit the famous Jorvik Viking Centre, wandering down The Shambles or gazing at the magnificent Minster which dominates the skyline.
It is also a well-off locale with a busy high street and a bustling retail environment.
In amongst the heritage there is a good spread of insurance brokers ready to do business with the community. However, despite its upbeat atmosphere, the city is not without its insurance challenges.
Hiscox is the only remaining brokered general insurer in the area – NFU has a presence and Aviva has an office dealing with life cover, but that is it on the provider side in the city.
Jelf has been in York since 2013 when it bought The Insurance Partnership (TIP). TIP had been in the area since 1999.
Stuart Brierley, Jelf’s York branch director, explains that the city is very much a satellite to Yorkshire’s insurance hub.
“York has forever lived in the shadow of Leeds,” he explains.
Edward Curran of family business PB Curran, which was established in the city in 1961 by his father Patrick, agrees but does not believe the lack of insurers is a huge issue.
We access the local Leeds market for the composites. We also deal with AIUA and Rural in Harrogate. Being in York is not a barrier to trading with insurersEdward Curran
On building insurer relationships Curran says: “We certainly don’t have any problems in that regard.
“They are happy to come and visit us and we access the local Leeds market for the composites. We also deal with AIUA and Rural in Harrogate. Being in York is not a barrier to trading with insurers.”
Commercial broker JMG Townends is part of JM Glendinning Group and managing director Dave Fryer echoes the view that insurer access isn’t a problem.
And, Zach Gray, commercial director of DE Ford which was recently bought by PIB, points out that Manchester and London are only a couple of hours away by train so meeting providers isn’t hard. Insurers also regularly send people out to the brokers.
You used to have the chocolate factories Rowntree’s and Terry’s but they have gone… The big metal-bashing industries that exist in places like Leeds and Hull really don’t in YorkStuart Brierley
Another potential challenge – and one all the brokers agree on – is staffing.
Fryer explains there are “lots of good candidates in Leeds or Hull” detailing that there are also strong candidates in York.
But recruitment is not as simple as it was in years past. Curran sums up: “It’s become more difficult [to attract people].
“The insurers have left the city. We don’t seem to have a problem but looking ahead to the future we may do.”
One factor that marks out the York market is the focus on leisure and tourism – something that diminishes the closer you get to Leeds.
According to Brierley the leisure sector has developed as other industries have fallen away.
“There is no major business or heavy industry left in York,” he explains. “You used to have the chocolate factories Rowntree’s and Terry’s but they have gone. The largest businesses if you look at the top are Persimmon Homes, Shepherd’s Construction…The big metal-bashing industries that exist in places like Leeds and Hull really don’t in York.”
The insurer view
Andy Baker, regional manager at Hiscox, is based in new offices in York city centre. The architecturally impressive building features a number of artworks and, more unusually, a decommissioned rocket dominates the open plan reception. Baker explains that the insurer moved into the building in December 2015.
“What we wanted was a hub that could be reached in around two hours from London. York was one of five cities shortlisted to be the home. I wasn’t involved but I understand that the city council were very welcoming and proactive in wanting to help us.
“Prior to the York office the Leeds operation was the broker facing business. We had a team of 10 to 15 people along with the liability and professional indemnity claims team.
“Within the building here we have over 200 people. The majority work in the direct business, which has its HQ here. On the broker facing side we have our underwriting centre for the North with 12 people and in the new business facing team we have another 10 to 12 people. All in all there are about 25 people.”
What are the features of the local market?
“Yorkshire is still very much Leeds. The one thing that makes it distinguished is how many good brokers there are in a concentrated space.
“Yorkshire is probably five million people but the number of firms in Leeds is high – it is described as over-broked but the businesses are very nimble with broader reach than just Yorkshire. York probably has about a handful of brokers. That’s due to the size of the city. Leeds is a huge financial, legal and industrial centre.
“York’s economic foundations are more commercial. Commercial combined and property and liability are strong. It’s reflective of York businesses. We also have food distribution, manufacturing, haulage and it is a big centre for emerging businesses. We’re seeing tech, advanced manufacturing etcetera… coming out from the university.
“It’s fair to say leisure and tourism are a big part too. Yorkshire was boosted by the Welcome to Yorkshire Campaign and the Tour de France coming here in 2014.”
What are the challenges?
“Some of the M&A on the broker side – Henderson and Aon is an example. That’s interesting and I think it creates uncertainty. At the same time it creates opportunity. On the staff side, people might not like a more corporate environment so we might see new start-ups over the next two years.
“Recruitment can be an issue as commuting to York can be a time drain. It is expensive on the train at around £30 a day if you’re coming from Leeds.”
York’s economic foundations are more commercial. Commercial combined and property and liability are strong. It’s reflective of York businessesAndy Baker
Despite the embers of some sectors dying away there are new sparks of industrial life forming. Much of this activity is driven by York University and the science and technology park attached to it. Agriculture has also increased in importance.
PB Curran is taking advantage of farms venturing into tourism.
“The agricultural side of the business has grown and developed,” reveals Curran. “We’ve seen growth because famers have diversified and benefitted from tourism with weddings, camping, farm shops and golf courses.”
You can see investment going in to business parks, retail parks and just the infrastructure generallyNick Houghton
As mentioned, another area of growth for the brokers is science and technology.
Curran adds: “It was historically carriage-works and Terry’s and Rowntree’s but those industries have been regenerated. We now have the science park and the two universities have expanded. That is ideal for us as we’re just around the corner from the science park.”
Gray, whose business is 50% charity cover with the rest made up of general commercial broking and a small amount of private client, details that he is seeing more interest in cyber and also environmental insurance.
Curran and Brierley both reiterate that cyber is growing and local businesses including famous York stalwarts have been affected by hacking. “Even Betty’s Tea Room has suffered,” notes Brierley.
The staggering thing is that it [the soft market] has not hardened… There is loads of capacity which is a great opportunity for usDave Fryer
Turning to the general economy, JM Glendinning Group MD Nick Houghton says there is lots to be positive about in York and Fryer agrees that local businesses are booming with tourism a large part of the city.
“The High St is always busy,” Fryer points out. Houghton adds: “You can
see investment going in to business parks, retail parks and just the infrastructure generally.”
It is also worth noting that, as the market is affluent, “the focus is not always on the lowest price”. That, along with the area not being over-broked, makes it a good place to do business according to Fryer.
Asked to gaze into a crystal ball and predict the future of local broking the interviewees were cheerful.
York has flooded badly on a number of occasions. Most recently it was affected when the river Ouse burst its banks on Boxing Day 2015. Personal lines customers can get support from the government Flood Re scheme but what about business clients?
Zach Gray: “Insurers now take a strict line in terms of application so you can have some challenges.
“We had some clients who were hit with the major flood on Boxing Day but insurers responded well in dealing with claims. Subsequent renewals have, on the whole, not been unreasonable.
“But for some people, because of their location we can’t help them.”
Andy Baker: “The floods came not long after we moved into the building. Luckily some contingency has been designed into the building to protect us from flooding – underneath there is capacity to take on water. We stayed open when everything near us was under water.
“We saw the Jorvik shut and it has not long reopened. Some businesses locally still haven’t opened and must have closed down. There have certainly been casualties on the business side of things.”
We had some clients who were hit with the major flood on Boxing Day but insurers responded well in dealing with claimsZach Gray
Fryer is looking to exploit the long-term soft market. “The staggering thing is that it has not hardened,” he explains. “After 2008 I thought it would but it hasn’t. I don’t see it happening. There is loads of capacity which is a great opportunity for us.”
DE Ford’s Gray is also optimistic: “There are lots of independent businesses. We see opportunities there.”
“I am positive about the future,” Brierley concludes. “This country has a world leading insurance sector and locally in this area we will always prosper.”
The Insurance Age team examine the most read stories for the week commencing 3 June 2019.Subscribe to our daily newsletter for all the latest news
- GRP-owned Sagars buys Thomas Cook
- Three directors out as Policy Expert buys loss-making Sure Thing!
- Hiscox creates Cyber Exposure Calculator
- PIB's £50m spending on brokers in 2018 revealed
- Insurers could face fines for £4bn dual pricing "rip off"
- Markel launches tech sector proposition
- Zurich-owned N&G launches new small craft product