News analysis: Will Marsh’s new model pay off?

closed doors

Marsh Commercial’s plan to close branches and open centralised ‘Centres of Excellence’ could create opportunities for brokers.

Marsh Commercial’s decision to centralise and shut down branches can lead to opportunities for smaller local brokers, according to experts in the market. 

In November, the business, which will officially be rebranded from Jelf in Q1 2020, confirmed it was to close down 14 offices (see box) before the end of the year. 

Subsequently, it was revealed the business is developing ‘Centres of Excellence’ to look after small business. 

It is believed that the closures will lead to redundancies in the lower-end of three figures as part of an operation code-named Project Wolverine. 

Brokers noted that this was likely to be a good chance for local and regional firms to step in and pick up both staff and business. 

“It’s a fantastic opportunity for us,” said Simon Mabb, group managing director of Leeds-based Romero Group. “We’re opening branches while others are closing them. We want to get some quality people to come on board.”

The Centres of Excellence are set to be located in Bristol, Glasgow, Harrogate, Leeds and Worcester.

The business detailed that these will handle SME customers with premiums of below £2,500, however, it added that this is not a set figure but merely a guideline.

Mandy Walton, chief executive officer of the Centres of Excellence, told Insurance Age at the time of the announcement that clients would be moved on a case-by-case basis depending on their needs and the cover they require. 

She commented: “We are looking at spending under £2,500 but it isn’t a hard and fast rule.” 

Marsh Commercial branch closures 1219

Closing branches


Leeds - Horsforth

Newcastle under Lyme
New Malden

Not call centres
Walton further stated that customers would be served from the channels they wanted to trade through, either on the phone, online or face-to-face, and stressed that the five branches will still serve local clients in addition to business from all over the UK.

She firmly insisted that the new units would not be call centres, adding that the people working there would be fully accountable advisers with a book of clients. 

Marsh Commercial has also been keen to stress the move as a positive and believes it will lead to growth.

If you serve clients with premiums up to £2,500 by way of a call centre, you can leave yourself open to competition from other brokers who don’t. There is absolutely a place for call centre business, but in the commercial sector you have to tread very carefully
Stuart Reid

However, call centres or not, insurance experts warned that if the reason for the centralisation process is to cut costs, this will almost certainly have an impact on service to clients. 

An unnamed broker stated that they believed this was a logical move for Marsh Commercial, but added that its success would depend on the execution.

“You can’t have heads based in every single office renewing £500-700 policies. It just doesn’t work, so I can see the logic of why they’re doing it, because it means more policies per person,” the broker added.

They continued: “The question is whether it’s purely a cost play, which I think it probably is because of the redundancies, or whether they are trying to free up time for people in the office to go out and win more business. It’s difficult to do all three effectively at the same time.”

Why Marsh Commercial believes the Centres of Excellence will succeed

In an exclusive interview with Insurance Age, Mandy Walton, CEO of the Centres of Excellence, explained that the locations for the centres – Bristol, Glasgow, Harrogate, Leeds and Worcester – were chosen because the staff there already had good experience of broking to smaller businesses. 

She declined to say how many staff would be working at the Centres of Excellence or how much GWP was likely to go through the centralised functions annually due to the consultation still being active. 

In Walton’s view, the proposition offers something different to other failed call centres, with the branches still keeping a “local focus”. 

“I am passionate about SME business communities,” she stated. “They make up the lion’s share of UK business. Providers have tried to be very prescriptive [in the past] but the approach we have taken is the right one. 

“We have talked to the businesses and we understand their requirements and we are not having a one size fits all approach. That will be the difference,” Walton added.

Meanwhile, former Bluefin CEO, Stuart Reid, argued that it did not come as a surprise that Marsh is now trying to integrate the purchases it has made and that the exercise would naturally lead to branch closures and staff reductions. 

“However, in my experience you have to be extremely careful when taking away that personal service even on small cases,” he added.

“If you serve clients with premiums up to £2,500 by way of a call centre, you can leave yourself open to competition from other brokers who don’t. There is absolutely a place for call centre business, but in the commercial sector you have to tread very carefully.”

Reid further urged Marsh to remember where Jelf and Bluefin came from. 

“They mustn’t forget that the businesses that they bought were themselves businesses that had acquired small brokers giving personal service,” he stressed.


  • September 2015: Marsh buys Jelf for £258m.
  • November 2016: Marsh buys Bluefin from Axa and states it will combine Bluefin and Jelf.
  • November 2017: Marsh rebrands Bluefin as Jelf.
  • April 2018: Jelf buys Scottish broker Clark Thomson.
  • March 2019: Phil Barton exits Jelf and Anthony Gruppo takes over as CEO.
  • September 2019: Marsh announced it will rebrand Jelf as Marsh Commercial in Q1 2020.
  • 15 November 2019: The business confirms it is to close four branches, with further offices at risk. Redundancies in low three figures are likely, as part of an operation code-named Project Wolverine.
  • 25 November 2019: Marsh Commercial creates five Enterprise Centres of Excellence in Bristol, Glasgow, Harrogate, Leeds and Worcester.
  • 29 November 2019: The business confirms a total of 14 branches will be shuttered.

CEO change

Jelf’s former chief executive officer, Phil Barton, left the business with immediate effect on 29 March this year. He was CEO of Jelf’s Insurance business between 2010 and 2015 and took over the CEO post from Alex Alway after Jelf was bought by Marsh. 

Prior to joining Jelf in 2003, Barton worked for Axa and Prudential.

New CEO, Anthony Gruppo, moved across to the UK from the United States, where he most recently worked as North East regional CEO of Marsh & McLennan Agency (MMA). 

Gruppo, who first joined MMA in 2013 as CEO of its South West region, has also worked as president of broker USI’s Fort Lauderdale division and leader of its South East regional US employee benefits business.

Making the model work
Many brokers have previously failed to make a success of the call centre model. Most notably, Towergate’s small business unit, later known as the Manchester retail unit, closed in 2017 with ineffective client transition blamed for the failure. It had been opened in 2014 before the consolidator’s financial dificulties and subsequet private equity rescue. 

Back in 2017, Towergate (now Ardonagh Group) CEO David Ross, told Insurance Age that the business had wasted money on the unit.

He described it as “frustrating” and noted that it had been an “incompetent spend”, adding: “We have spent £12m upgrading servers and hardware last year. You don’t object to [doing] that. But when you consider the amount of money that was wasted on Manchester and having to spend money ‘un-wasting’ it, that is really objectionable.”

You have to start to think about the way people deal in the future. We’re moving towards a more Netflix generation where people pay everything monthly and you do everything online
Graham Coates
phone business

Brokers further noted that it might be a risky manoeuvre to move to a call centre-style model in a hardening market. The same unnamed broker highlighted that, when renewals are going out with a 15% mark-up, clients will be more likely to switch to another broker if they have just been centralised into an office where they don’t have a personal relationship with anyone.

“Where it’s gone wrong in the past, is that they’ve centralised it and usually put too many policies per head, so all the good talk about people spending more time with clients and being on the phone more often ends up being hogwash,” the unnamed broker added.

Meanwhile, Hamilton Fraser chief operating officer Graham Coates argued that the key to making this model work was having an effective online system where clients can self-serve.

Coates, who previously worked as group MD for Bluefin, continued: “It’s like personal lines, you have to start to think about the way people deal in the future. We’re moving towards a more Netflix generation where people pay everything monthly and you do everything online.”

Availability of staff to talk to clients and whether the centres would be open outside the usual working hours of 9am to 5pm were also listed as critical points for driving success.

“I was at Bluefin eight or nine years ago and we were already doing this sort of thing then,” Coates added. “It’s all been tried before, it doesn’t sound very novel or original does it?”

While it remains to be seen whether Marsh Commercial can make this model work where others have failed, experts were keen to point to opportunities arising for other brokers. 

Gordon Hazelton, director at Worcester-based broker Hazelton Mountford Insurance Brokers, explained: “The sort of business that they would consider dealing with through that centre would be the sort of business that we as local independent brokers would do personally face-to-face with our clients. 

“But it depends on what they do and whether it’s local business that they put into it. If it’s a national call centre, it might be an opportunity for other regional brokers around the country as well.”

Hazelton added that the large national brokers had always used a different business model to regional brokers. 

“It’s not going to stop the likes of us continuing to grow and service our clients,” he added. “I don’t think that complex commercial business can be dealt with without receiving advice.”

The unnamed broker suggested that clients who were being served in the most traditional way from branches where you walk in to have a chat would be the most likely to be unhappy with being funneled into one of the Centres of Excellence. 

On the phone
On the flipside, they argued that most medium-size to large brokers would also be telephone servicing accounts of a smaller size. 

The expert continued: “If it’s a £1,000 premium client and you’re pulling in 20-30% commission, you can’t spend that much time face-to-face and you’re not going to visit them anymore. There’s not much you’d do for those clients before you’re running at a loss on them.”

This leads to the question of whether this model, despite previous issues and failures, might be the future for brokers as the smaller end of commercial lines business is commoditised. 

Mabb believed that a number of private equity-owned brokers will be watching to see if Marsh Commercial succeeds in retaining enough business as it cuts costs. 

“If they’re able to retain, say, 80 percent of the business and they’ve chopped out a massive amount of cost, will others think it’s a good model to follow?” he asked.

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