Value-added passion

If you are ever feeling unhappy about your role as a broker then try and meet Chris Caunce. His enthusiasm for broking and business is infectious, seeing the broker as "bringing together the economy" and believing that no other profession requires so many skills. He says: "We need the skills of diplomats, social workers, accountants and lawyers. We need to cut through the boring façade. It is exciting and everyday is different."

Caunce says brokers have the ability to build a relationship with a client that the insurance companies can only dream about. He enthuses: "We are people and the insurance industry can surprise clients by having personality. There is too much of a '10% less' attitude when we could be understanding what is driving the price and tackling it with the client, therefore making it interesting." One of the most dynamic offerings Caunce brings to the client base under his operation is investigating claims and establishing what he calls "far more accurate claims estimates." He cites that insurers do not share loss assessment reports with either broker or claimant. The operation is called Themis, and includes interviewing the claimant, statements and examining records. He says the client appreciates the service and that it can save money on renewal, especially where there are several claims in the year. Caunce adds that it gains the respect of the insurer, improves the retention ratio and is a strong marketing tool. One example is a West Midlands-based padlock company, Henry Squire and Sons, which had 60 liability claims a year. Following the application of Caunce's techniques, the premiums are now less than a fifth of what they were before.

Caunce had differentiated his brokerage by being of the first to set up an online scheme for professional indemnity and liability for freelance contractors in 1996. Insured by Mitsui, it has the trade name Freelanceinsure.co.uk. Policy documentation can be made available within two minutes and Caunce can even identify the day's sales on his BlackBerry.

Caunce is continuing to innovate by building an engine for small businesses, including a 'quote and buy' facility for small professional practitioners. Caunce comments: "Brokers need to identify the next opportunity and there are many that the big lumbering insurers could never do. We need to have the right attitude and establish relationships with the £500 premium client because they are potentially easy meat for insurers."

Caunce deals with around 20 insurers and is concerned that in the soft market some are going out of their way to avoid claims they would normally pay up for with little hesitation. Although complex, a recent case with an insurer has made Caunce rethink his longstanding relationship with the company, showing how claims can often be the true test of any broker-insurer partnership.

He adds: "The clever ones (insurers) recognise the brand ... that's all they have. The large players have poor brand awareness and haven't majored on it. The connection is often with the insurance company and the business is renewed on the back of the association with the insurer rather than the broker. Who would have heard of Hiscox six months ago?" Although he praises Hiscox's marketing he believes the insurer's direct offering could be their Achilles' heel, saying: "The direct offering gives a sweet and sour feeling to the broker who will think 'if I don't go to them they'll go directly,'" though, he adds: "At least you know where you stand, and plenty of insurers aren't so straightforward about it."

Caunce's client base is predominantly in the north-west, although there is a spread across the country and they are prepared to put in the travel hours to meet potential clients. Broking director John Batty made a trip to the Shetland Isles to see a Blackwood whisky distillery. The journey included a six-hour boat ride, a flight from Manchester to Aberdeen and a lift on a horse and cart!

The company reached £10m of gross written premium in 2001 and has grown steadily. In the April 2006 to 2007 financial year revenue was £2.7m, with around £1m of pre-tax profits, excluding executive bonuses. Caunce comments: "We want to grow but not lose control of the business." After starting being a self-confessed "outspoken and ambitious" member of staff at his previous broker, it is unlikely Caunce is going to be happy working for anybody else.

Caunce subscribes to the view that "in business only the paranoid survive" and he adds a further word of advice: "Don't stop thinking!"

CAUNCE O'HARA

Managing director: Chris Caunce

Established: 1995

Number of offices: One

Location: Manchester

Number of staff: 32

Main line of business: Corporate

Gross premium income: £18m.