Adding structure

Joe Kelliher started Kerry London in 1986. With experience as a Lloyd's broker for the construction industry, Kelliher initially created a dedicated brokerage employing people with a similar background.

Today, Kerry London focuses on three areas: 55% construction, 25% property and 20% leisure. The company places business via a retail division, which deals with clients directly, and a wholesale underwriting agency, which places business via other brokers. In addition, it operates a separate independent financial adviser, Kerry London Financial Services.

Alan Roe joined Kerry London last year to oversee integration following the acquisition of APN Insurance Services, Mailfox and McGinn. He says Kerry London is looking for further commercial-based acquisitions locally and talks are ongoing for deals between £5m to £10m.

He explains: "By the middle of next year, people will have to decide whether to go with the Financial Services Authority or not. But they might be leaving it too late. There is a window of opportunity and people selling now will probably get the better deal."

Roe has appointed a corporate service manager to assist him in ensuring everything is in place for early application to the FSA. He says that insurers also need to get ready, as FSA compliance will affect them as much as brokers. In particular, he says sufficient renewal notice needs to be given.

He says: "Compliance will make us more professional as an industry but we have gone way over the top for what was required. European Union directives are adhered to the nth degree by the UK but in other parts of Europe they do the bare minimum."

Kerry London's leisure clients include Sussex and Surrey cricket club and the broker plans to expand this division and is considering whether to open a facility for county cricket club members. Construction is still the major area of business, however, despite the fact it is a difficult industry to insure in the current hard market.

Roe says: "We have had difficult discussions with clients explaining premium increases and more excesses. Even if a business has an excellent record, insurers take the view that they are part of a class of business."

Clients' needs

KL outsources the risk management as it does not have the technical ability in-house to meet its clients' needs. "We don't want a risk management team that just goes out and tells clients what they should have," Roe says. "We want a team that will actually do something."

Risk management is extremely important in the current litigious climate, according to Roe. In particular he points to the need for directors' and officers' liability cover and says it has to be sold to clients.

With the help of reinsurance broker Benfield, Kerry London has also created a captive arrangement for scaffolders and roofers. The facility gives premium stability and Kerry London hopes it will help them reduce premiums over the next two years.

Roe points out: "Some members of the National Access & Scaffolding Confederation saw premiums rise by 150% last year and were fearful they would go out of business if this was repeated."

The facility is popular with clients and insurers, and even if a client has a large claim the maximum premium increase is 10%. On the open market they may be uninsurable. Roe says that insurance companies also feel more comfortable and more able to give competitive rates because the reinsurance is at the front.

Kerry London plans to set up similar facilities for other businesses and is keen to become associated with more trade organisations like the NASC, which requires members to adhere to training and health and safety criteria.

Roe says: "We are working with companies that can prove their association has got some teeth in improving members' health and safety and training records. We try and pick up our facilities on the back of this."

KERRY LONDON

Director: Alan Roe

Established: 1986

Number of offices: two

Number of staff: 60

Gross premium income: £42m.