Motoring forward

Leslie Hughes, at his £1.5m purpose-built head office in Newtonards, says being ahead of the competition in television advertising and policy innovation has spurred his firm's success.

In the 1990s, Hughes employed advertising agency Saatchi and Saatchi, and the result was a strap line 'Insurance as individual as you can get', with images including a granny driving a 4x4. Hughes believes, with its panel of insurers for cars, they can insure any age group or car.

In addition to private motor, which is the predominant source of business, Hughes and Company is moving into commercial vehicles, taxis, household insurance and annual travel. Hughes' partner Jim Bowers, who joined in 1983, is in charge of commercial insurance - mainly small to medium-sized enterprise business and around 20% of the business. The broker really started to motor in the early 1980s, when Hughes signed exclusive deals with Lloyd's insurers Palladin (now Brit) and British Standard. Hughes claims this was a first in the province. Altogether, six Lloyd's syndicates were used, though now only around 5% of business is transacted there.

Hughes says: "We have our own policies in home, travel, commercial vehicles, taxis and cars. The insurer accepts the policy and we issue them on their behalf."

The broker deals with 25 insurers, and for car insurance there is a panel of around 10. He says: "We try to have a spread. Quite often insurers like different things and they are not in competition. The main ones have bases in Northern Ireland, and the ones who don't - such as Groupama, Fortis, AIG and Provident - visit regularly."

One of two executive managers, Mary Fealty is the company's 'statistician' and is in constant dialogue with insurers regarding issues such as rates. Hughes comments: "We will notify insurers if there is a discrepancy in the quotes they are providing."

Hughes and Company did once handle its own claims; Hughes says this was stressful for staff and now uses claims handler Motor Insurance Services.

Recently he has been focusing on the internet, which he says you "can't ignore". At the moment, a phone call is still necessary after using the website but the aim is to provide the ability to access quotes, mid-terms and renewals online. However, the office is accessible for customers and face-to-face business and will remain an integral part of the business.

Hughes has some criticism for Misys General Insurance (now Open GI, after being bought by Montagu Private Equity): "We are reliant on its computer system, and things that could previously be done in a day can take six months to achieve."

Hughes says it is the softest market he has seen in 40 years, hence two small acquisitions this year: Harrison Insurance Brokers in Londonderry and RG&A Stewart in Magherafelt. A third acquisition is scheduled for September.

Hughes and Company also acts for the Northern Ireland Public Service Alliance, the largest trade union in Northern Ireland, with 43,000 members.

Hughes feels the Northern Irish market has been neglected by some, including the British Insurers' Brokers' Association. However, he has used Northern Ireland's relative independence to exchange ideas with brokers on the mainland, in the knowledge that they would not be used against him. He adds the province has become more attractive as the political troubles have abated.

Hughes gives praise to his major competitors in NI, Prestige and Open and Direct, which he says "are both excellent well run brokerages."

Hughes is not happy about the need for Financial Services Authority regulation, which he feels was a result of too many arguments between the Institute of Insurance Brokers and Biba. He says fees have tripled and laments: "The public are bemused by the literature, postage costs are up 35% and we need FSA approval to change our business plan."

When asked about the next five years, Hughes comments: "There is a strong management structure. I am almost 59 but am driven to see us become bigger and more successful. Looking ahead, I see my son, who looks after commercial vehicles and taxis, as taking a more prominent role in the business."

His confidence in the future can be seen, when he comments: "If I can get people to see our set-up here, I think 99% of the time they will want to do business with us."

HUGHES AND COMPANY

Partner: Leslie Hughes

Established: 1977

Number of offices: Seven

Locations: Newtonards, Ballynahinch, Ballymena, Portadown, Glengormley, Londonderry, Magherafelt

Number of staff: 170

Main line of business: Motor

Gross premium income: £50m.