Premier Guarantee - A guaranteed winner

Despite winning a prestigious broking award recently, sales and marketing director Robin Plaster admits that his firm is "technically an underwriting agency" as it deals only with one insurer. However, he qualifies this by saying that many insurers simply are not interested in his product because it can take up to 10 years before an insurer can make any money out of the line. Plaster is referring to the newly constructed buildings latent defect property market, in which his company is responsible for insuring any structural damage between two and 10 years after it is built.

The insurer of choice is Liberty Syndicate 4472 and its peer reviewer, Geoffrey Lynch, fittingly sat at PG's table at the Royal Albert Hall as Premier Guarantee's chairman Gary Devaney and Plaster collected the Commerical Lines Broker of the Year award from RSA's broker manager, Paul Donaldson.

Plaster explains the relationship with the Lloyd's insurer: "We place the business with it (Liberty) under a binding authority unless they choose not to write it. Any broker seeking to place business with Liberty has to go through Premier Guarantee; if they choose not to place it then we have the right to go elsewhere."

In addition to dealing with clients direct, PG deals with a range of brokers including Willis in Ireland and Aon in Spain, with which it has long-term agreements. There are other introducer commission arrangements with brokers and PG is also prepared to write business on an ad hoc basis with any broker paying them a commission. It has also expanded into Spain with an office in Madrid and has the top five Spanish developers on its books already, as well as opening an office in Ireland. This could just be the start of a European foray for a firm that seems determined to stick to its niche.

The main competition for PG and Liberty is from Zurich and the National House-Building Council that, according to its website, is the "standard-setting body and leading warranty provider for new and newly converted homes in the UK". The NHBC is a "non-profit distributing company" and claims that nearly 80% of new homes benefit from its warranty insurance policy, Buildmark.

Despite the falling property market, which has battered housebuilders' ability to sell new homes (also see Market Watch, pp.32-33), Plaster is bullish about the future and spies an opportunity to win business from his rivals. He comments: "In a downturn, developers are looking for best value and the previous loyalty to suppliers that has perhaps been driven by inertia is being challenged. Many of the housebuilders have cut 40% of their workforces and shareholders are screaming. In these hard times, they are reviewing their suppliers." Therefore, Plaster is hoping that longstanding partnerships with firms such as the NHBC will come under scrutiny.

PG is well placed to capitalise, having provided guarantees for over £30bn of developments already and with expansion plans in place for overseas growth. The broker has 45 surveyors in the UK and an in-house technical services unit. Building risks range from the conversion of mill buildings to eco-developments and each risk needs to be assessed thoroughly; an experienced sales team will meet the client to arrange a quote. Plaster says: "A lot of risks are desktop based, such as car quotes, however for this we need to see the development and check that the construction process and foundations are in place." He adds: "The claims we have are low-frequency and high-severity and we often need sophisticated workmen to carry out repairs such as cracked walls: you can't just send the local brickie along."

Any mortgage buyer's solicitor will have to ensure that a warranty is in place and, occasionally, PG will issue retrospective warranties where there is no undue moral hazard. In addition to new homes, the firm provides cover for social housing, commercial buildings and self-build projects. PG deals also with the nuts and bolts of new buildings, such as the controversial Home Information Packs, energy assessments, air pressure and acoustic testing.

Staff care

The broker is not only proactive in winning new business (which has seen it entered in The Sunday Times Fast Track 100 - which tracks the fastest-growing sales at Britain's private companies - three times already), but has also been recognised by the broadsheet twice as one of the 'Best Companies to Work For', including this year. Of its staff, 74% said that the firm gives them a "fair deal" and all employees and their families have health insurance. In addition, there is performance-related and profit-related pay, critical illness cover and even the opportunity to work from home. There is also plenty of training on offer, including off-site courses on management. The focus is not just internal - PG has a presence in the local community: it sponsors a rugby team, makes charitable donations and recycles its office supplies.

Although Plaster admits that the company is approached frequently by interested parties seeking to acquire or invest in it, he says that Daveney, as the majority shareholder, is happy as he is. With the company running the rule over locations such as Italy and Brazil, the latter of which Plaster believes has a "massive demand for housing" and is one of the world's fastest-growing economies, it could be next stop Rio for the broking warranty experts from Merseyside.

PREMIER GUARANTEE

Sales and marketing director: Robin Plaster

Established: 1997

Locations: Birkenhead

Number of staff: 120

Main line of business: New-home warranties

Gross written premium: £30m.