Break for feedom

Martin Sykes and five directors joined Beaumonts in March 2001 and, using their experience and contacts from Aon, where three of the six worked, and Leeds-based broker Smithson Mason Group, which was Folgate's first acquisition in 2002, proceeded to grow the business book by 25% before engineering a management buyout in April 2002. There are now eight brokers in the management team aged between 34 and 55.

In 2001, the firm turned over £7.5m of gross written premium and £750 000 of brokerage. In 2006, revenues climbed to £3.6m and the company moved into purpose-built offices, which Sykes says has really helped drive the business.

He continues: "We turned a well-respected, traditional broker into a consultancy where we partnered with clients.

"We had a blank canvas and we knew we could implement our ideas of service provision if we were masters of our own destiny. However, it is bloody hard work and there are no short cuts."

A major shift in the business has been moving onto fees. Sykes wrote a paper on the subject in 1992, and today he says the kind of sophisticated clients that Beaumonts targets demand fees. He comments: "We want to separate what broking costs from the cost of the insurance program." He adds: "It is always about insurance program costs before risks and threats. It should be the other way around. We are trying to move clients away from the way they have been conditioned to thinking: price, price, price. It is a battle of ideas."

Sykes adds his staff are prepared to visit clients up to 10 times a year, and a quarterly review is a key driver for the broker's relationships. Sykes doubts whether this kind of philosophy could fit in with some of the consolidators in the market.

In 2004, Beaumonts established a standalone risk management arm Instil Consulting, manned by six employees and dealing specifically with the practicalities and paperwork of health safety. In addition, Beaumonts offers a software-based risk management tool, and disaster planning and business recovery.

In November 2005, Beaumonts acquired the Guiseley-based CCMH Group, with £1m fees and commission income and a good sized personal lines book that services directors of its mainly private UK corporate client base, with typical premiums over £30 000. A new managing director, Gary Proctor, has been appointed at CCMH to ensure Beaumonts is obtaining the best value out of the brokerage.

Both brokers were members of the Willis Commercial Network, and Beaumonts signed a new contract with WCN in 2005, tapping its international connections. Beaumonts will move onto Software Solutions Partners Insight service, which is WCN's partner software platform, from March.

When asked about insurers, Sykes says: "Service levels are generally acceptable in they concentrate on their reason for being. We have not been happy with insurers' outsourcing claims, and we have to make a judgement on the claims' service from the insurer."

Is he concerned by the soft market? "Many brokers will moan about the soft market, but they will also moan about the hard market. They will always find something [to moan about]." Perhaps he is less worried about the market because of his fees model? He says: "I want the best deal for the client and, therefore, am not necessarily looking for rates to rise."

When asked about recruitment, Sykes says it is a challenge for client service staff, although he feels administrative roles are easier to fill. He jokes: "Everybody around here seems to be Scottish, Geordie or from Yorkshire."

Sykes and his fellow directors are making plans. He says: "We are here for the long term and are not driven by accountants. We want to be successful and continue to grow." When asked if he has a target in mind, he is reserved. "We don't think in terms of GWP because that allies business to the cost of insurance. However, we don't want to grow too big and dilute our service concept."

BEAUMONTS

Managing director: Martin Sykes

Established: 1968

Number of offices: Two

Locations: Bradford and Guiseley

Number of staff: 65

Main lines of business: Corporate

Gross premium income: £30m.