Broking Success: Niche is the word

Managing director of Martinez & Partners, Jonathan Evans, admits he knew nothing about insurance when he first started out but soon became fascinated by the career path he saw opening in front of him. "I was hugely interested by this thing that kept being talked about, 'le Lloyd's'", he says with a smile.

In 1999, he returned to Britain from South Africa - where his parents had emigrated - and secured an internship at Miles Smith. He was promoted to managing accounts in motor fleet and for trade association schemes, such as for the Asbestos Removal Contractors Association. He remembers: "It allowed me to learn about all classes of business; each has a huge number of different exposures."

Martinez & Partners had used Miles Smith as its Lloyd's broker, which was how Evans had come to meet the then owner, Paul Martinez. Originally set up as a sole practitioner in 1995 to place a binding authority into Lloyd's for a French underwriting company, the firm was keen to develop overseas business to complement its portfolio, which also included commercial and personal lines.

Evans' appointment in 2001 was supposed to focus on international binding authorities but the events of that September soon meant he had to change tack: he decided to develop UK business. Through contacts with a lawyer, he secured business with several ultra high net worth Russian and Middle Eastern clients. He says: "It was when the oligarchs were first coming over and buying £10m houses." Evans admits it was a steep learning curve and that, in hindsight, he realises a new entrant into the market representing clients from a new area would raise eyebrows; he praises the likes of Hiscox, AIG (Chartis), Sterling and Oak in particular for taking "the time to listen".

By the middle of 2002 with gross written premium of around £3m and three members of staff, it became clear that another niche was needed. Evans focused on industries perceived as high risk and that struggled to buy insurance where the specific market was short on capacity. With a wry grin, he explains: "One I picked up on was nightclubs; I had some knowledge of them as well as an interest."

Perception
He decided to complete the industry's training programme to become a certified licensee, which helped him to learn the risks and needs of the trade. He explains: "I think the insurance market was working to the view that everyone who has a nightclub is a rogue, that it is all dodgy and they are all going to get burnt down, which is not the case." In six months, using a centre in South Africa to cold call the industry, he secured 30 clients. He says: "This niche put us on the map a little bit with some insurers because we were starting to show a decent volume."

Over the next few years, the company expanded into construction and higher risk allied trades such as roofers, scaffolders, civil engineers and lift engineers. In 2005, Evans succeeded in a management buyout and is now the majority shareholder, with Paul Martinez remaining as a partner. The company currently has an income split of 15% private clients, 40% binding authority and 45% commercial, the major player in which is self-drive hire. Evans had seen the latter of these come into the Lloyd's market during his time at Miles Smith.

He says: "I didn't feel, from a retail point of view, that the brokers sending them in to us understood it particularly well." In 2008, he refocused Martinez & Partners away from construction, putting even more emphasis on self-drive hire by establishing an in-house claims team and starting a joint venture with a third party. The service provides a number to call in the event of a collision at any time. Evans stresses that the service-providing partner has agreed not to perform any third-party data capture and does not generate referral fee revenue.

The service is designed to reduce personal injury claims and can also organise replacement cars to third parties for free as well as sourcing repairs to be undertaken with a network of garages, avoiding further bills. He says: "If the client is not engaging accident management for their replacement vehicle, the chances are that they probably won't make a personal injury claim. We reckon it has a 45% on-average improvement to the loss ratio of a self-drive hire fleet over three years."

The service is funded entirely by Martinez & Partners and initially will make "a dent in the bottom line" but Evans believes that, over time, it will secure client loyalty, prove a key tool for recruiting new business and help in negotiations with insurers. He highlights: "If you come to us and over three years we reduce your claims cost and reduce your premium then you are going to stick with us."

Niche goals
Having grown his business to 15 staff and £15m of GWP, Evans is aiming for 25% year-on-year growth in profits. He is keen to target premiums from £1,000 upwards across all areas and has moved away from using composite insurers for non-niche business. He says: "We weren't getting the service and it just wasn't really working. There was no flexibility, no real support on claims; it was always an uphill battle."

Over the past 18 months, the company has migrated such business to the International Insurance Company of Hannover after putting a general commercial binding authority in place. Evans states that the insurer's support and communications gives clients bespoke quotes and better protection than the old model: placing many small bits of business with numerous composites. He describes the improvements as "a revelation".

The experience is part of his reason for a change of opinion, that insurance needs to be driven by relationships, not price. He says: "We were minded that we should show all business to every market and go with the cheapest. That has evolved over the last 10 years. We don't think that way any more and very much believe it should be about symbiotic relationships: we are moving clients a lot less."

Evans encourages the use of Smart objectives - specific, measured, attainable, realistic and time bound - and all his employees are encouraged to sit Chartered Insurance Institute exams. Additionally, there is a company online facility that is used to help them with career development programmes. He says: "We try to hire good people to use their abilities, not so they can be stifled." Employees are encouraged to influence their own working practice. He explains: "Whatever it is, I'm not allowed to say no. Our staff can come up with anything and we have to run it for 30 days." He cites double-sided printing as one example of a recent success.

Evans' is an inclusive vision that he is keen for the industry to adopt. He says: "I think insurance has a terrible image. We have to attract the talent and set the stall out better for what it can offer in terms of remuneration and job satisfaction." Evans would like to see more emphasis put on spreading the word to school leavers and university students and plans to start an internship programme this year. With a steady focus on niche areas and a passion for a vigorous, pro-active workforce, whoever takes a role at Martinez & Partners should feel lucky.

Martinez & Partners
Managing director: Jonathan Evans
Established: 1995
Number of staff: 15
Lines of business: High net worth, property, motor fleet, high risk liability and marine
Locations: London and Basingstoke
GWP: £15m

Source: PB – May 2010