A Bridge to success

Mike Backner left school at 16 and, following a spell at Federated Employee's Mutual Insurance Company, was the youngest of three entrepreneurial youngsters who took out a £300 loan in 1971 to set-up a corporate broker. Michael Hunter has since left the business, while Gilbert Cohen is a co-director. Backner says: "In those days insurance was dead men's shoes and I couldn't wait until I was 45 for a couple of promotions."

To overcome the difficulty of gaining agencies, the 'new kids on the block' became the Manchester office of a Macclesfield-based broker Bridge Insurance whose managing director, John Bridge, took a 25% equity stake in the business.

Then, after only two years, they decided to buy-out John Bridge's stake, and retained the name Bridge Insurance Brokers (Manchester). Ten years later, John Bridge offered his business to Backner and his partners, who had by this time out-grown him but because of the personal lines nature of its business, this offer was declined.

Backner says: "We always wanted the name Bridge Insurance Brokers and the opportunity arose five years ago to buy the name."

Bridge has made only two acquisitions. Backner comments: "We made a small acquisition in 1988, which added 15% to our business. In 1992, we made another acquisition, which was considerably worse, as the clients were cast-offs. We discarded 40% of the business almost immediately and it was our last acquisition."

Backner cites a "defining moment" when, during the hard market in 1984, Bridge decided to shed 8% of its client base, reducing the number of claims by 40%.

Most of Bridge's custom is corporate clients based in the North-west, including a large property owners' portfolio, fleet and cyber-liability risks.

He reflects: "A fairly hefty chunk of central Manchester is owned by our clients." And, Bridge, which has no delegated authority, is moving towards fees for the larger risks.

Bridge also covers bad debt insurance - 10% of its business - and has an environmental unit headed by Oxford graduate David Brierley. Meanwhile, it is looking to grow and develop its due diligence and risk management areas.

There are also three national schemes for postmasters, florists and the memorial trade, via, in no particular order, insurers Norwich Union, Royal & SunAlliance and Allianz Cornhill.

Backner places a strong emphasis on quality clients. He says: "We are very selective about our prospects. Our sales team has to convince a committee for each prospect. We have our own surveyors, risk managers and health and safety teams. Competitive premiums come third after the quality of service, technical expertise and security of markets. Premium savings pale into insignificance if you are looking at a major loss that is not being paid."

Bridge has a Fusion agency, a media hot topic, but Backner feels "comfortable" with the new insurer panel and says: "It seems to have been a seamless transition - it is a quality panel."

Despite Bridge's success, the current fiscal year ending 31 March, has been a flat year for premiums while profits have been hit 20%. Bridge's worst year in five is because of the "soft market and restructuring" according to press-shy Backner. He is bullish about this saying: "Our worst year in five would be a good year by most people's standards." He expects similar results over the next 12 months but expects today's investment to reap benefits thereafter.

Backner says regulation has cost £100,000 for each of the past two years. He says: "We employed a compliance officer, looked at procedure models for every department, and have formed a conflicts of interest committee. We have spent a lot of time on in-house training and are proud of the staff which we have trained to CII standard."

Growth at the broker is going to be driven through sales. Backner says: "The North-west is a vibrant economy and there is a strong underwriting presence in Manchester. We are investing in our sales department so we can control the cost of sales and the quality of our clients. We will have a front-end team of five supported by a broker sales' and marketing team."

Backner's drive and enthusiasm for broking is set to keep the business in good shape, though it needs to be wary of its acquisitive Manchester rivals.

BRIDGE

Managing director: Mike Backner

Established: 1971

Number of offices: one

Location: Manchester

Number of staff: 80

Lines of business: Corporate

Gross premium income: £31m.