A tale of two brokers

Peter James is an entrepreneur, the type that finds it difficult to keep their toes out of the business water. In addition to broking, James has become a director of several restaurants and an electrical parts company, though insurance and broking remains at the forefront of his ambitions.

He is not afraid of a challenge: having already established Peter James & Co several years ago - a very similar business to Footman James - he took over the unprofitable and effectively bankrupt Stewart Miller McCulloch which, despite a healthy client base, had been derailed by a poor culture at the top of the company. It took 18 months to turn around but, having cut its costs by 45%, picked up an office on the high street and reduced its debt, the business is now concentrating on growth. Meanwhile, the two principal shareholding directors, Cheryl Maybury and Tracey James, are ready to take up the baton of succession.

Having steadied the ship, James feels that a recession might represent an opportune time to seize some initiative. He comments: "We have gone back a bit in the market but we are now going out marketing. You have to provide the components of brand - what the clients want well done: good product, pricing, presentation - you have to look good and the client needs to feel it is getting a perceived value." Stewart Miller McCulloch provides policies for everything from restaurants, shops and pubs to offices and property owners; Peter James & Co concentrates on classic car and bike insurance. Although the two brokers are in adjacent buildings and work overlaps between them, James believes it is important that the names of the two businesses remain separate.

James has reservations about the traditional broker model, feeling that it has little future in the industry. He is now moving his business slowly but surely onto managing general agents and binders, saying that it is a balancing act for insurers because they lose more control, especially if the book is sold at some point. However, his longstanding relationships with insurers will give him more leverage to achieve his goal.

He describes his model as a "virtual insurer" with the personal lines as schemes business. He comments: "We are unusual doing this as an independent and we try not to use wholesalers." The broker works closely with KGM and Equity Red Star; interestingly, Footman James also has a close relationship with Equity.

Realism

Despite wanting to grow both his brokers, he is keen not to burden the company with weighty expectations. He says pragmatically: "We don't have a five-year growth plan - it is hard to know and it depends on how our competitors do. We would like to get to the size of Footman James but it is not a race."

His management philosophy is transparent and reassuringly straightforward: "You try and treat people the way you would like to be treated yourself." He adds: "On deals, always operate on a partnership basis - always leave some spare, so if something goes adrift then there is a little bit of room in there for everybody."

He remarks on the market by comparison: "I think the attitude of some of the big brokers has been short sighted but if you are a plc then you don't have much choice but to focus in on that year."

Although well into his sixties, James has no plans to hang up his boots just yet. He says: "I'll retire not beyond 2014 but I'll be around for the next five years. I thoroughly enjoy it and if I wasn't doing it will be a waste of my experience."

James founded Footman James with Peter Footman in 1983. Modestly, he comments: "I saw a niche and wanted to work for myself." He continues: "Brokers had no idea about sales, marketing and advertising. Right from the beginning, we attended shows, advertised and used public relations. We went for the practical classics, although I only got involved by accident at Bain Clarkson: I had no interest in cars at all although I've come to appreciate them." He grew the business to £6m of gross written premium before selling to an unlikely home - the Northern Ireland electricity board Veridian - in August 2000 and was attached to the financial services division Open and Direct.

After a distressed sale by Veridian, he helped complete a management buy-out of the business with private equity house Alchemy. The business was later split up and sold to Aon and Equity respectively at a large profit during the days when it seemed a broker was being snapped up every day. James is now attempting to recreate that success. Having worked through recessions before, James is philosophical and optimistic about the future: "Today is the new normal but if you get it right then there will be an awful lot of people getting it wrong. There already are."

STEWART MILLER MCCULLOCH and PETER JAMES & CO

Managing director Peter James

Established 2005 (SMM) and 2007 (Peter James & Co)

Location Oldbury

Number of staff 30

Main lines of business Commercial (SMM) and specialist vehicle (PJ)

Gross written premium £6.5m combined