BJP Insurance Brokers - Building for the future

Tucked away in leafy Wokingham is a bright, open-plan office in which lies comfortable sofas and the managing director's office. What sets this quiet suburban broker apart from its local rivals is that over the last 11 years it has risen from a little-known commercial lines broker to a construction specialist commanding £28m in gross written premium, of which around half is sourced from a successful underwriting agency called Focus. The agency specialises in SME construction risks and is used by over 150 other brokers across the UK. Managing director Barry McGoun believes the broker's success is due to never compromising its business aims, even when times are tough.

McGoun explains: "We decided to concentrate on building a business and not just flogging insurance; profit was never the main focus." That is not to say that financial goals are not important at BJP, where each employee is tasked with both those and regulatory aims. Neither is BJP shy when talking about its commissions. McGoun says: "Most of our bigger clients know what we earn; one of them even remarked 'you poor bugger' (when he saw the commission)." He believes that the possibility of disclosure does not bother most brokers and that it is only the ones with several layers of commission that will be worried. He adds that brokers of such type, like Towergate, are more likely to feel uncomfortable about disclosure than a broker like BJP, which earns £3.7m a year in commission.

BJP is named after its three directors, Barry McGoun, John Finch and Peter Faulkner. McGoun is managing director of BJP's brokerage and holds the majority of the shares, while Faulkner is in charge principally of the wholesale Focus underwriting agency side. McGoun stresses that all three of the founding directors are equal when it comes to business decisions. Staff members are briefed regularly by the directors on the direction and growth plans of BJP and all employees are encouraged to bring concerns and questions to the managers. McGoun states: "We operate a completely open-door policy here; anyone can come to see me."

One of the hardest managerial decisions McGoun has had to make in recent times was in turning down opportunities to expand through acquisition. The decision not to buy was made because of the remote locations of the potential targets and the subsequent lack of control he felt he would have on the broker's compliance as well as the day-to-day running of the business. In addition, McGoun made the decision to close down the Focus Swindon office in order to streamline the business and improve efficiency, a move that he described as "difficult".

All of the staff members were offered relocation packages, including their travel expenses paid for the first six months and financial help for relocating their homes nearer to Focus' main office in Carlisle. Of the few who did not take up the offer, a small number were nearing retirement age and thinking of stepping down, including the branch manager. McGoun says that it was knowing this that prompted the decision to shut the branch down when he did.

Managing BJP has brought McGoun triumphs and failures over the last 11 years. One of the firm's best initiatives involved outsourcing some of its telemarketing, on which McGoun comments: "The expense and time being spent was just too much for the two companies (BJP and Focus) and since the move was for the appointment making and lead generation only, it has worked well."

Despite witnessing growth in internet-generated business, the company's email marketing strategy that was introduced in February 2007 did not turn out as successfully as the telemarketing, though McGoun is still baffled as to why: "It might have been the literature used, though we hired a professional marketing company so it shouldn't have been. Having wasted a lot of money setting this up, we didn't want to waste any more asking recipients why they hadn't responded to it." Online banking has also presented BJP with numerous technological hiccups, leading the broker to choose to pay its insurers via cheque, a practice which seems almost archaic in today's e-fascinated society.

Embrace

The experiences have not left BJP afraid of technology. The firm is one of a growing number of brokerages to develop its own software system for staff use rather than rely on a package from a software house. McGoun comments: "Most of the software houses were too fixed on what they wanted (the software) to do rather than what we wanted. So, for our underwriting side we've developed our own system that we've been using for the past few years. We have three programmers that developed an underwriting system based on a well-known platform."

Asked about BJP's future, McGoun predicts steady growth with perhaps a few staff members being added both at the retail end and on the underwriting side. Becoming specialists in one or two types of commercial insurance may also be on the cards, though McGoun was coy when it came to naming its areas of interest. Maintaining independence is key for BJP, but McGoun has yet to be persuaded of any real positives for a broker such as BJP joining a network: "We speak to networks regularly and Tony Cornell (of Cornell Consulting) acts as a consultant for us, though it's not really for us. Being in Insurance Age's top 100 brokers, we already have the leverage to be able to negotiate with insurers. Joining a network wouldn't really bring that much to BJP."

Ultimately, McGoun wants to be able to ensure the survival of the company for the next generation of managers. Retirement is not even on the agenda "for at least four more years" and in the meantime the managing director has just one goal: "To make BJP a force to be reckoned with."

BJP INSURANCE BROKERS

Managing director: Barry McGoun

Established: 1997

Locations: Wokingham, Carlisle

Number of staff: 55

Main line/s of business: SME commercial

Gross written premium: £28m split between the two businesses.