James Hallam - Independent thinker

James Hallam's managing director shares the concerns of most independent brokers in today's acquisition-hungry market, though that has not dented his confidence. Instead, Paul Anscombe finds the prospect of being surrounded by consolidators as a challenge to which he can apply his strategic skills and market knowledge to keep his broker afloat. He says: "It's going to be a tough couple of years for brokers like ours that are determined to stay independent."

Despite his predictions that new business wins will remain soft, Anscombe remains confident of his broker's future. He anticipates a £100m premium business over the next three years, a significant proportion of which is expected to be underwritten in-house by JH. The company's facilities comprise delegated authority underwriters, as is the case for Arnold Fisher Insurance Services which was acquired in 2004, and a number of managing general agents that currently trade under the JH name but will soon be known as Touchstone, pending Financial Services Authority approval. The majority of JH's business will continue to be specialist, covering a diverse range of insurance including technology, media, high net worth and professional indemnity for clients based throughout the UK. There is also a financial services arm, the offerings of which include flexible benefits.

When Anscombe joined JH from Lark Insurance in April 2004 he was determined to increase productivity by focusing the business on niche areas. This process has not always been easy, especially when acquiring smaller brokers. Anscombe notes: "When we acquired Arnold Fisher, a commercial broker in Watford, we found it really difficult initially to get them to focus purely on travel policies, as their customers had always known them as a one-stop insurance shop. The decision paid off and the broker has now doubled its turnover." Staff members also declared their concerns when Anscombe chose to centralise claims handling in the city, though after an initial period of resistance, this too proved a successful furtherance of Anscombe's business model.

Culture

There is a culture of openness and trust at JH, so it is unsurprising to find that Anscombe provides his business divisional heads with a great degree of autonomy in running their departments. There is one divisional head for each business segment, as he explains: "The divisional heads are accountable for their budgets and results. They make key decisions for their team (but) it is also important for us in senior management to support them." Most of the day-to-day activities are overseen by operations manager Diana Bratt, although Anscombe does not lock himself away in a private office: "The dictatorial approach in which management delegates everything and does very little is not ours. My main role is to give people direction. This is a business geared towards growth and that means having specialists in place to deal with office problems, whether in IT, finance, underwriting or wherever."

While strategy may be Anscombe's main passion as a managing director, he regards staffing equally as important. He says that these are the most challenging issues to resolve, adding: "The most difficult decision I've had to make was to close our Brentwood office." After making two acquisitions in 2005, JH was operating out of five offices and some were covering similar lines of business. On reflection, Anscombe is certain it was the right business decision but admits that informing the staff and then having to lose some of them was hard: "We encouraged the majority of them to relocate and some of them did. Some chose to find work elsewhere and there was a small number of redundancies."

Staff considerations are high on the agenda, particularly when JH makes acquisitions. Anscombe claims that, should an opportunity arise for the broker to buy a profitable business that would result in "a lot" of redundancies, he would walk away. Anscombe adds: "If you look at the acquisitions we've made, we've tried to keep all the staff. When we buy a broker we don't just want the business, we also want the people."

Growth

Anscombe, who is determined to keep JH based in London and the home counties, believes any new business will remain soft but that renewals may see an increase of 4.5%. In addition to plans to increase its business organically, JH will also focus on promoting its PI products in the market in 2008, on which Anscombe says: "More businesses need (PI) than ever before; the quantity of opportunities in that market can only increase. There are also very few brokers on the market that are pushing their PI policies." He hints further that the environmental side of PI is an area "which is growing and worth keeping an eye on".

JH has a positive rapport with other brokers in its chosen business areas, including a good working relationship with fellow travel insurance specialist Vantage. He comments: "Insurance is challenging, but I love the strategic side of it all and talking to other brokers about it."Anscombe believes this mutual appreciation between brokers can be of great benefit, stating: "There are a lot of people in this industry who've grown up together; you know their business and they know yours. The reality is that you can use this to share knowledge and information."

Anscombe believes the FSA's decision to regulate travel insurance presents a golden opportunity for JH, as travel agents and tour operators that offered cover previously may now struggle to keep up with the regulator's rules and turn to specialist brokers for help.

In reiterating JH's unflinching pledge to remain independent, Anscombe expresses his belief that brokers following this path will ultimately be rewarded. He prophesises: "There are so few truly independent SME brokers left that insurers will soon have to rethink their distribution strategies. At the end of this consolidation era we independents will stand out from the rest."

JAMES HALLAM

Managing director: Paul Anscombe

Established: 1982

Locations: Docklands, City, Watford

Number of staff: 75

Main line of business: Specialist commercial

Gross written premium: £32m.