Investing for the future

While some firms, after achieving record profits may rest on their laurels and congratulate themselves, J&M has reinvested its hard-earned money with an eye to the future.

After making around £750,000 in profit last year - £0.5m more than in 2003 - J&M has invested £100,000 in its telephone system, connecting the broker's branches, £0.5m in its information technology systems and more money on office refurbishment. The target is to reach £150m gross written premium within three to five years, thus growing its current GWP fivefold.

The firm's GWP is dominated by a nationwide taxi book, which totals £25m, including public and private hire, and was recently bolstered by £4m with the acquisition of black-cab specialists Protector Policies. Protector was established in 1921 and employs the person who wrote the first-ever black-cab insurance policy in London in 1964 with Norwich Union.

J&M's latest acquisition was One Stop Insurance in Manchester, with £1m of mostly taxi business, and £1.5m worth of commercial premiums.

The firm has well-developed plans to grow organically through new products such as Travelbility, which offers cover for those with disabilities and illnesses. The scheme is underwritten by Axa and has obtained Association of British Travel Agencies' approval. Launched in November 2005, it has links with travel agencies and sells to charities and private individuals. For the sale of each product, there is a charitable contribution, with in excess of £4000 having so far been donated.

Another scheme is Cover Complete, a household policy underwritten by NU and supported by property developers and estate agents, which offers one-year's free building insurance to first-time buyers. Harris says free contents cover is also available depending on the estate agent and property developer.

Both this and Travelbility are sold through their 12-strong call centre, which is now 12 months old.

J&M also provides professional indemnity for immigration consultants, as well as insurance for pubs, clubs, restaurants and takeaways, while 8% of J&M's business is personal lines.

In order to fulfil its own demands, J&M developed its own technology company, Insurasoft, in 1990. It has written the systems for the taxi market, such as PHDirect, because J&M's management felt insurers and brokers did not have the controls in place to understand the portfolios and management information involved. Harris says: "The system can break down statistics, allowing the user to maintain the good-quality business and leaving the poor business to attract the correct premium or to look elsewhere." The system links to other brokers used by J&M.

Meanwhile, Misys is used for back-office administration, personal lines and a record-keeping system.

Fraud prevention has been a priority in J&M's taxi business. A database of more than 350,000 taxi drivers has been documented and, if information differs from the past, the system will flag it up for investigation. The database has been in operation since 1986 and all non-disclosed accidents are permanently logged onto the system.

Harris stresses: "We are not prejudicing any statutory rights; it becomes purely statistical after a period of time."

Each council has a different health and safety standard for taxi drivers. London has only recently gone through licensing and they are still modifying the legislation.

There is an internal claims manager at J&M, and Harris says: "For the non-fault incidents, we put taxi drivers into a replacement plated cab immediately, so they conform to one of the 370 different licensing versions imposed by the county councils."

There are also dedicated training facilities with both internal and external trainers, including Searchlight. Harris says: "We are trying to ensure the right training is given at the right levels."

Commenting on the future, Dodds says: "I have been brought in partly because of my experience in acquisitions. I ran one of Cox's three divisions, Broking Insurance Services. J&M was one of Cox's customers, and that is how we met."

Dodds continues: "Next year we anticipate four acquisitions, and the following year six or seven." A further acquisition this year is expected.

J&M has ensured all its acquisitions and investment so far have been self-financed.

J&M INSURANCE SERVICES

Chairman: Martin Harris (left) Chief operating officer Paul Dodds

Established: 1981

Number of offices: five

Locations: Epping, Holborn (2), Kingsbury and Manchester

Number of staff: 76

Lines of business: Mainly taxis; specialist commercial

Gross premium income: £31m.