Towering d'Inverno

Having joined Primary Broker Services to head up its London and South East office in February, Dominic d'Inverno is more convinced than ever that it has the right formula for its success and that of its brokers.

Referring to the "blinkered world of insurance composites" that d'Inverno left behind, he is enthusiastic about the opportunities of the more entrepreneurial PBS culture. Four months into the role, he says: "It is pure excitement, it's really a roller coaster ride. To be masters of your own destiny is something that is exciting, challenging and scary but that motivates you. It gets you out of bed with some vigour."

PBS, which d'Inverno admits has more work to do in educating the market about its intentions, has already spent much time promoting its proposition - designed in direct relation to brokers' needs. The novelty of this has clearly not waned for d'Inverno. "The greater levels of autonomy staff have here is very refreshing, I don't feel like I'm shackled in any way. It's about this trust and verify issue. I'm given the trust but I need to deliver in a compliant corporate governance style and while I continue to do that it is about dictating our own direction within the PBS blueprint."

About PBS's management culture he explains further: "It's not a form of matrix management. There are structures and there are reporting lines but it's not autocratic, it's about business people talking to business people who understand everything that needs to be done. There's no feeling of hierarchy - whether talking to Philip James, majority owner of Primary, or Jonathan Davey."

The PBS proposition, d'Inverno explains, is able to stand apart because of the size and/or complexity of the risks it takes. He continues: "PBS's strategy is based on how it saw its opportunity within the market - about how things were shifting in terms of centralisation - with big insurers reallocating resources to deal with consolidators or network brokers. We felt that, as a result, there was a service vacuum being created for bespoke offerings for independent provincial brokers."

The process then saw PBS validate this view, which set about canvassing brokers to identify demand for such a proposition.

He adds: "Brokers were very responsive to the idea and, having established that there is a demand, hopefully now the results speak for themselves."

With 18 years experience of dealing with brokers, and having done some broking himself, d'Inverno is confident that he can push the targets PBS has charged him with, without diluting the experience for brokers. "The whole proposition is about understanding what brokers want. It is so much about relationship management and listening to brokers. That's why we're confident in our proposition because we have listened.

"It is about trust and integrity and having a two way relationship where we challenge them and they challenge us. It's all the things that make our industry worth being in."

He also firmly believes that insurance is still an industry where personalities, strength of character and knowledge can make a difference.

Gaining market share

Having identified that growing quickly is not on the agenda, preferring instead the idea of an optimum number of brokers in order to deliver quality, how will PBS gain market share? "For PBS it's not about grabbing market share but I believe that it will come off the back off our proposition. We are not prepared to dilute what we offer to our brokers and the relationships that we build with them," d'Inverno states.

With the emphasis firmly on service and relationships between itself and brokers, the PBS offering may be music to many brokers' ears - the only snag being that it is only seeking incremental growth because, as stated, PBS is being careful not to grow its agency base too quickly or grow just for growth's sake.

As d'Inverno explains: "I can't look into a crystal ball and say what our strategy will be for the networks and big consolidators but at the moment our success is based around independent provincial brokers, which is where our proposition really stacks up.

"The key is building our profile through promoting understanding of what we're about and what differentiates us and I think there is a lot more work to be done on this. However, if people want to talk to us then we will talk to them. To be frank we don't have a problem with leads or contacts - it's making sure we get the right ones."

The fact that PBS picked up around a dozen leads at the recent British Insurance Brokers' Association conference further illustrates that PBS has no need to be out in the market soliciting for new brokers. However, d'Inverno does add: "I don't think we have fully explored and identified all the brokers out there that we could be dealing with at the moment."

So are there any typical reasons why brokers decide PBS is not for them? "The markets we operate in are quite close nit. Brokers talk to each other, and they are now approaching us. With what we offer we expect something in return - some brokers may decide they can't satisfy the return that we need for the service we give," he explains.

It is a similar strategy for the growth of PBS itself - by increments and with a close eye on ensuring the right quality. Because of the high levels of autonomy staff are given at PBS its approach to recruitment is unorthodox. "It is very much about finding people that have the prerequisite skills then almost creating the role for them," d'Inverno explains. "The key is we want to give everyone room to breathe no matter what level they're at. We don't want to put staff down to a strict job profile that says this is your job and this is your skills set. It is about what they can bring to the party, what they can add. This allows much greater scope and opportunity to use their full skill base."

In terms of driving the PBS proposition, d'Inverno says: "The focus is on trying to build further momentum. That's what we've been doing in London in the past six months, trying to build this with different initiatives, getting closer to our brokers and having close dialogue with brokers." If the telephones continually ringing in the office are anything to go by, momentum does seem to be gathering at PBS London. He continues: "Yes, now the phones are always ringing - to start with they weren't, which made me uneasy because that means we are not interfacing with clients."

When asked how the PBS model will evolve d'Inverno says: "At so many different levels there are changes going on but there are likely to be some rebranding issues for the whole of PBSH, companies including PBS ATD, Rural and Online Underwriting. It's quite a new entity as a holdings company, and work is ongoing to identify and implement how we can work collectively better. There are areas of expertise within each one that we and our brokers could benefit from. One obvious example is Rural with farming specialities, we could divert business to them without setting up new agencies so there are definitely some major opportunities for the whole group."

This unifying of all the companies under PBSH was recently seen in its agreement with Royal and SunAlliance and Axa - claimed to be the biggest binding authority deal ever made in the UK. As d'Inverno explains: "It's a three year deal so it gives us stability and longevity - and the whole point about the binder is that it brings all the companies within PBSH into that binding arrangement. Having shown our capabilities with our underwriting we've increased the limit from around £16.5m to £25m, so it means we can write something like 95% of all small to medium-sized enterprise business." Within that binder, PBSH has set targets of £120m gross written premium in year one and £500m GWP inside three years.

Extent of commoditisation

Regarding commoditisation and how far it will go and where it will end, d'Inverno says: "It's very difficult to tell at the moment how much is by natural course and how much is due to the softening market. I do think more business will go down this route as technology improves but I think there is a limit to this. We have bucked that trend because our vision is that it will never go so far that bespoke offerings and excellence in underwriting will not be needed."

D'Inverno also subscribes to the view that the extent of commoditisation is limited due to a lack of commonality between risks. "It's not so homogeneous in nature - even corner shops in terms of their different uses and offerings can be quite different - and these variations are much more difficult to accommodate in a commodity-style package product. Human beings need to be involved in that process," he asserts.

However, d'Inverno conversely urges brokers not be complacent. "I do think brokers should be concerned by this. They've also got to look at where their commission is derived from, in terms of where they make their profits and it's probably not at the end of the market anyway."

Regarding the commonly espoused wisdom, usually from large insurers, that traditional brokers need to add value to survive, d'Inverno says: "I'd challenge that. I'd argue that brokers are adding value as they are providing a face-to-face service to their clients and understand their clients' needs."

He adds: "We have to differentiate between personal and commercial lines because of the premium derivatives of that. Certainly in personal lines, however, traditional brokers still have a place. It is still a people business even in personal lines, and some clients still feel more comfortable dealing with a broker. If brokers can make a profit from it, why would they necessarily need to innovate? This is a people industry and sometimes I think we tend to hide behind processes, procedures and IT platforms and we lose sight of the most important factors be that the staff, customers or end client but it's about people."

He continues: "Buying patterns are continually changing in the 21st century but from the customers' perspective they still want to have those options about how they purchase. Certain things we want to buy face-to-face - when buying a new TV system you'd still rather someone was there explaining what that product can do. People like being sold to and enjoy the consumer experience. So, we should be careful as an industry not to force everybody down the same route."

Broker pressure

The pressures brought to bear on brokers purely by regulation alone have often been touted as the cause of their inevitable downfall. However, d'Inverno says: "Some of the smaller players are still out there turning in very reasonable profits, so it's very difficult to say what will happen in the future. I think the Financial Services Authority needs some time to bed down properly, some of the ways people are starting to talk about FSA is more positive. There are still issues around dealing with the end client and how they show transparency."

He also adds that one of the most significant changes brought about by the FSA - and one which he considers will be hailed as watershed in future - concerns training and competence. "If we want to move our industry forward I think that's a really sound way of helping that happen," he says. "I and many others have issues about attracting young dynamic people and one of the reasons why we don't hang onto them is we haven't traditionally adhered to stringent terms and conditions guidelines. In future, I think we'll look back and say that really served a vital purpose."

He is also passionate about the need to ensure fresh blood keeps flowing into the industry. "We don't do all the things we used to and we've fallen off as an industry. I think insurers driving out cost to justify acquisitions has been at the expense of investment in new staff or graduate training because it was an easy area to overlook. However, it is already coming back to haunt them and the whole industry.

"I personally would rather get someone who has the aptitude and attitude that needs developing rather than somebody that has some experience in the industry. I'd rather shape and mould somebody but it's difficult to get those youngsters. Somehow we need to make people understand the appeal of our industry because once you're in it then it is quite appealing but the sad reality is we don't sell the proposition of insurance well at all. I think we need to collectively take responsibility - it would be easy to point the finger but we've all got to take responsibility.

"Insurance is perceived as being middle-aged men in suits and has no reputation as being dynamic or challenging. In reality, however, the whole of financial services moves at an incredible lick these days and we really ought to represent ourselves in a better manner as it needs more dynamic people."

CV

2006: Managing director - London and South East, Primary Broker Services

2003: Area manager - City and London regions; regional manager - London; and development manager - City region, NIG

2002: Associate director - marketing and compliance, Riverbourne Group

1989: Sales and development manager roles, CGNU.