Specialist advice, specialist value – creating a competitive advantage through expertise

Specialism is a favoured route for brokers and if they get the formula right, is often a surefire way to secure long-term success and increase business value.

Consolidators have long been aware of the attraction of specialists and there are many examples of niche firms being bought up, as seen by the example of Towergate (now Everywhen) in the 1990s and beyond.

Indeed, recent acquisitions of specialist brokers by consolidators include Gallagher buying Manchester’s Bridge Insurance Brokers, which specialises in property, construction and corporate business.

Meanwhile, Partners& continues to sweep up firms and a recent buy included M&DH Insurance Services, a Bedford-based construction and manufacturing focused broker. A further case in point was Specialist Risk Group buying Superian Insurance Group, a medical liability and healthcare intermediary.

Emerging opportunities

Although a specialist may start out small, there are plenty of growth companies around and because of their depth of knowledge, it is often possible to spot emerging opportunities and add on new affiliated products.

We focus on niche areas, like entertainment, international operations, hazardous environments and complex medical histories where our experience and understanding of the risk means that we can offer terms where others can’t.

Dave Bowcock, Principal Insurance

This is typified by Manchester-based motor specialist Principal Insurance, which was set up in 2011 by Dave Bowcock, who had previously gained experience with another motor provider, Carole Nash.

Principal covers a range of motor classes, including motorbikes, high-performance cars, motorhomes, classic cars and convicted driver policies.

Bowcock explains that from the start, he knew the business would focus on motor and he started with motorcycles, where he had most knowledge, with other products added on at regular intervals.

“For example, we saw motorhome as an opportunity during the pandemic and investigated where, within that sector, we could gain traction and build. By making sure we understood customer needs, forging partnerships with key underwriters and creating schemes to satisfy segments that were perhaps not being best served, we rapidly grew our share and now hold around 10% of the market.”

He continues: “Courier was also the obvious place to make the hop from personal to commercial lines given our presence in the bike market and growing stature within van. Fleet was then a natural extension, one which saw us import experience and expertise in order to properly satisfy market need.”

Difficult and complex

The ability to take on more difficult or complex risks is often central to specialist brokers and this is where relationships with underwriters matter and can take time to build – in particular, becoming a Lloyd’s broker can have a transformative effect.

Elmore Insurance Brokers, launched in 2015, focuses on areas such as cyber, fintech, emerging technologies and payment service providers.

A UK Lloyd’s broking licence was secured in 2021, which provided direct access to the market’s underwriting expertise and it has since developed European operations.

Pulse Insurance is also a Lloyd’s coverholder and a specialist in the life, accident and health and sport and leisure sectors, focused on more complex areas where cover is harder to obtain.

One size doesn’t fit all

Managing director Torquil McLusky, says: “What we see is that one size doesn’t fit all and when a risk is complex or unusual you need to speak to someone with who understands the requirements straight away. We focus on niche areas, like entertainment, international operations, hazardous environments and complex medical histories where our experience and understanding of the risk means that we can offer terms where others can’t.

“We pride ourselves on the quality of the service we provide. We recognise that price is important, but when you’re looking at a challenging risk, it’s the ability to understand what the client wants quickly and respond with 24 hours that’s often just as important. That understanding comes from a deep sector knowledge in the areas where we operate. ”

Wholesale 

Specialist brokers can also expand their reach into wholesale markets.

Kevin Coomber, managing director of SRG Global Risk Solutions (the wholesale insurance brand) says specialism also provides enormous value for brokers who need to place niche risks.

“Our core business is operating in niche areas, with specialist wordings and insurer partners. In the current climate, where insurers have more capacity for difficult risks, it’s important brokers and their clients can tell the difference between a generic product and one specifically tailored to the sector they operate in.

“That’s where we support brokers, giving them access to the specialist knowledge, wordings and insurer relationships they need to place difficult risks with confidence. 

"Ultimately, difficult risks require specialist understanding to achieve a long-term solution at a fair price, and that’s what helps brokers keep their clients for the long term.”

Likewise, trade body The British Insurance Brokers’ Association provides numerous specialist schemes for its members – alongside deriving valuable income from these to be reinvested into a range of services.

Huge potential

Specialism is the traditional broker heartland while also having huge potential for future growth, allowing much needed start-ups to establish and provide guidance, where risks are most complex or simply if clients have questions to ask.

As Bowcock says: “Advice is particularly important in specialist markets. We’re not the broking equivalent of box-shifters. In a sector like ours for motorcycle insurance, agents need to know what they’re talking about in order to gain customer confidence and ensure they secure the most appropriate cover.”

Join the debate: Sign up to attend the Broker Expo on 8 October at the Birmingham NEC

The session ‘Specialist advice, specialist value – creating a competitive advantage through expertise’ takes place at 11:45AM – 12:15 PM on the Specialist Stage