Principal Insurance's chairman Damian Keeling and managing director Dave Bowcock explain why being more than just a bike broker has led to rapid growth.
▶ How did you come into insurance?
Dave: Mine was a £40 a week decision. At the start of my career I was offered that much more in insurance than banking. I didn’t know what I wanted to do when I was 16. I went to the RAC and they had a really good apprenticeship with two years’ training. I left when the office in Manchester closed. At Carole Nash I worked up to sales and operations director and left eight years ago.
Damian: We both started at Carole Nash in 1996. I started as managing director and came from an accountancy background.
▶ What is the background of the company?
Dave: We are not just a bike broker – we do specialist bike, but we are multi-niche. I started with a blank piece of paper and worked on good customer service, treating suppliers and staff right. With that you can make a decent business.
I had always wanted to set my own broker up. I had the know-how but not the money, so Keith Mason, who is big in the motorcycle industry, but not insurance, did the investment.
▶ How did the launch go in 2011?
Dave: I spoke to my old insurance partners, got some staff and premises and Transactor were very supportive. On day one it was me, shortly followed by two others. I was answering the phones, doing everything, and then started recruiting. You can’t be the player manager and also wash the kits.
What you have got is the luxury of no legacy when you set up a new business. You can start with all the right bits in place and make them the norm.
I was answering the phones, doing everything, and then started recruiting. You can’t be the player manager and also wash the kitsDave Bowcock
▶ When did Damian join?
Dave: For the first three years I was in a muddy field every weekend listening to bikers. We had no money so I literally had a tent and camped out. It was easy to sell after that because most of the competition packed up at 5pm and left while we were still in the field.
I had kept in touch with Damian and it was becoming clear that crunching numbers on spreadsheets all day wasn’t my thing. He came along in 2014 when we had 17 people.
Damian: We needed to restructure how the investment was made and look ahead. Doing that meant we could buy computers, servers and employ people. Talking to the bank in a language they understand is what I have done all my life.
▶ What changed?
Damian: It was a lot of hands to the pumps. It was growing really quickly. It needed to look forward and say ‘what can we afford to do?’ It was very seasonal with terrible winters and brilliant summers.
Dave: We had about 15,000 policies in 2015. Now it is getting on towards 60,000.
A lot of the bike underwriters also do niche and classic cars. We got those turned on along with van, where we knew the margin was more lucrative. It also eased the seasonality of the book.
▶ What is the split now?
Dave: By GWP bike is 50% and van 40%.
Damian: By volume, van is 20% compared to bike being 60%.
▶ Have you achieved what you set out to do?
Damian: You would never in a million years have forecast what we have achieved now. We have absolutely overachieved. I would have been certified if I had forecast our current numbers in 2014. We went from £700,000 turnover in 2013 to £6m last year.
Dave: We broke into profit a year early [in 2015].
▶ What are the future targets?
Damian: By 2020 we are going to be in the £15m turnover range and can plan ahead for staff and systems.
When we launched the three year plan last year we said we wanted to be double the number of policy holders but not double the number of staff. We are not making a big deal about getting to 100,000 policyholders. That is not the point. But we will be fit to do it.
▶ How will you get there?
Dave: We are going to do more motorhome as we see that as a growing market. As is couriers with multi-drop people purchasing on the internet. Also high end vehicles north of £60,000 values. There will a bit of ‘more of the same’ because it is such a big market and we are still young.
▶ How do you recruit?
Damian: There was a point when we were about 70 staff that we, or someone here, knew everyone we recruited – friends, relations, colleagues. It is probably only in the last year that we have gone beyond that.
Dave: About 90% of the 17 people when Damian started are still here. It is better to retain people and keep training and developing them.
We have external apprenticeships with NVQ people, we have two internal staff who do full inductions of a six week programme. When people first go on the call centre floor we have a buddy system and then people go back into training again.
▶ Do you do schemes?
Damian: The more we can put on Transactor’s insurer cloud the more it varies away from a standard product as insurers can play with it on a real time basis. It becomes a changed version of the original in no time.
Dave: The more focused schemes you have such as young riders, scooters, convicted drivers, the more business you bring in.
We also do affinity schemes with manufacturers, for example Royal Enfield. We’ll answer the phones as Royal Enfield Insurance.
We have absolutely overachieved. I would have been certified if I had forecast our current numbers in 2014Damian Keeling
▶ What is the company’s approach to clients?
Dave: We didn’t want to do just bikes. Anyone who spends hours and hours building a kit car wants to talk about their insurance for more than just three minutes.
Damian: We don’t target staff about how long they spend on the phone. If it takes 25 minutes we won’t come down on them. It means the client is more likely to come back next year.
▶ You made acquisitions in the past – will you again?
Dave: We’ll look at more acquisitions but they would need to be compelling and really good deals. I want to do several things really well rather than 20 things averagely.
Damian: Nearly all our growth has been organic.
▶ Why did you set up in Dublin in April 2015? Any more international expansion on the horizon?
Damian: No, the likes of Spain and France are very different markets. We knew the Irish market was a good place to be and now we have 25% of it.
Dave: We set up the Nash office in Dublin in 1998. Going back in was a natural move as the biking market was crying out for competition. There are no aggregators over there and we know the market inside out.
▶ What are your strengths?
Damian: Dave is very people orientated. He is completely straight with people, everybody in the office and our insurers know where they stand. He is completely trusted, which is a big thing in this market.
Dave: Our strengths complement each other. Damian is very analytical. He uses his accountancy background to analyse things in a commercial way. He is good at spotting key issues.
▶ Is the business structured to stay independent for the long term?
Dave: We own 30% each and Keith owns 40%.
Damian: We love what we are doing and are just going to carry on for as long as we can. We have a youngish management team which wants to carry on for at least 15 years.