Broking success: All I want for Christmas…

▶ When was Bennett Christmas set up?

In May 2010. It was the merger of two local family businesses – Christmas Insurance Brokers and Bennett Dawes. The shareholders of both firms were good friends and had been for years. The plan was always to merge but it had to be at the right time. The catalyst was both firms being members of Broker Network and taking part in one of its Dragons’ Den events at the same time. At the event you present your business to industry experts and they give an opinion on where they think you should take it. An 80-page questionnaire that raises the question of mergers was part of the process, so it made the businesses revisit the idea. That was in February 2010 and it was completed in three months on 1 May 2010.

▶ What are your main lines of business?

Bennett Christmas is a retail broker with 80% commercial and 20% personal lines business. Personal is split between motor and household with a little bit of travel. Commercially, property owners and motor trade is a big part of what we do. Since the merger we’ve formed BC Underwriting which is our underwriting agency. The main lines of business are professional indemnity (PI), property owners and leisure – pubs, hotels, guest houses. Both businesses operate from the same location. 

▶ Why did you set up BC Underwriting?

We weren’t getting the service from wholesalers and underwriters that we wanted so we thought, ‘well, we’ll do it ourselves’. We found somebody to start it with us three years ago and the rest is history. Opportunities come along through contacts and we’ve had the fortune to employ a number of people that are experts in certain fields, which has resulted in us being able to grow those areas using their expertise. 

▶ What are your best performing products or lines?

PI and property owners. Those are the two largest accounts, closely followed by commercial combined and fleet.

▶ When and how did you get started in insurance? 

My first job was at Barclays Bank in 1983 in the machine room. I did that for 18 months. In January 1985 it just so happened my father had a job advertised for a personal lines account exec and l applied for it. I started doing motor and household business. It was a very small local broker, five staff in a second-floor office in the town centre.

▶ What path did your career take from there?

I became a junior partner and bought one of the partners out. I then bought my father out to own the business 100% and then sold some of it to my brother-in-law. We ran Bennett Dawes for 10 years until the merger in 2010.

▶ How far have you progressed with your three-year strategy to become a £20m business by 2018?

We’re currently at about £11m gross written premium (GWP). We’ve got a couple of acquisitions that we’re considering at the moment. There were a couple that didn’t come off last year. There’s also organic growth in both elements of the business and that’s a process that takes a bit of time to filter through. So we’re on target, although I’d like to be further ahead. 

▶ What was your GWP when you announced your growth target last year?

About £8m. BC Underwriting’s doubled in size in the last 12 months. That’s where a lot of the growth has come from.

▶ How much organic growth do you hope to achieve?

I think there’s probably 15-20% within our account that we could achieve over the next year to 18 months on both sides of the business. What we’ve found is in underwriting you do a lot of property owners business for a broker but you don’t do their PI – there’s an opportunity there. It’s just that they don’t realise you do it, and likewise lots of PI relationships don’t do their property owners with us. There are opportunities with the right conversations and it’s the same with our retail space. 

▶ Why did the acquisitions fall through?

We put them through the model we use and we were at one position and they were somewhere else. We couldn’t make it work. There’s no point in just putting income on the top line if it’s not coming through to the bottom. There’s a walk away price and so we walked away. It’s all very well growing and growing and growing, but if your gross profit doesn’t change or your net profit doesn’t increase, there’s no point.

▶ What makes brokers attractive to you?

I’m looking for a broker with the same mix as us: local, community, perhaps a family-run business with an 80/20 commercial personal split. RMJ [Rayment, Matthews and Johnson], which we bought in 2014, had the same ethos as us. We knew we’d secure their clients because they’re used to being dealt with in the same way that we treat our customers. If the business is more personal lines based it doesn’t matter, but we prefer commercially driven accounts like most brokers.

▶ Have you had any offers to buy your business?

Yes, we’ve had an offer within the last couple of years. It was out of the blue and we were inquisitive, as you would be. We all sat round a table and wrote a number down and the number offered wasn’t quite where it needed to be. We haven’t finished what we set out to do yet. We’re five years into a 10-year plan and selling the business would be like giving up before we’ve completed it. 

▶ How has the PI book you book you bought from Howden in January 2015 worked out? Are you on the lookout for more books of business?  

It was a retail book and it worked really well. We renewed most of it. We’re looking to help brokers out with PI books as well. If brokers have got PI books with a number of insurers, we can combine it into perhaps one market for them and get them enhancements as a result. But we will look at anything if it’s in the space that we trade well in.

▶ Is there anything else Bennett Christmas is considering for the future?

We’re looking very much at placement strategy. Personally, I think the broking market is changing. As a broker it’s very difficult to deal with everybody. Locally clients deal with Bennett Christmas, not with Aviva, NIG and so forth. If you ask customers ‘who’s your insurance with?’ their answer is Bennett Christmas. I wonder whether dealing with four or five insurers only isn’t the way forward and we’re possibly moving in that direction. You can’t service the account sizes that these companies want. So I’m thinking we’ve got these 40 agencies we deal with, actually do we need to deal with all those carriers now? The purists will say you need to be independent, but it’s a question we’ve been asking ourselves. The people you partner with, their footprint becomes wider and they will write more for you because you’re placing more business with them.

▶ Have there been changes in customer buying behaviour?

We did some research and people actually don’t know what a broker does. We think they do, but if you ask the general public, they don’t know – certainly the youngsters don’t. Now they go straight online to comparison sites and that’s how buying has changed over 10 years. As brokers we have to engage them and get them back to dealing with us. It’s not just about being transactional we’ve got to offer more: social media, information, sponsorship of local events and being seen at local networking events.