Broking success - Sydney Packett & Sons: Prized Packett

There are probably not many brokers that can claim to have insured every grain of wheat and egg in Australia but Sydney Packett & Sons can. Neville Packett, son of the firm's founder, secured the contracts in the 1960s during one of his frequent travels around the globe seeking new business. Other notable successes included extensive business in Tonga, where the broker organised insurance for the country's first hotel and an airport. The broker still holds the latter account, although others have fallen by the wayside.

Sydney Packett started his firm in Bradford in 1920. Having gained experience in Newcastle and locally, his original intention was to meet the insurance needs of the area's textile trade and its wealthy owners. Charles Packett, co-owner with his brother Andrew, admits that he finds it hard to conceive of the difficulties his grandfather faced. He says: "Imagine trying to set up a business then. It is two years after World War I, then we head into the 1930s and probably the worst depression the country has ever seen. Nine years later we had World War II. I've never managed to get my head around it."

Despite the challenges, Sydney built a successful and thriving business but, as the 1950s arrived, it became clear that a new direction was needed as a result of the local textile industry's decline. In 1951, having been joined by Sydney's sons Neville and Duncan after their service in World War II, the firm acquired its first commission from a statutory body: the British Wool Marketing Board. It was the start of a fresh approach that reached beyond the boundaries of West Yorkshire and one that led to many similar accounts.

Andrew Packett explains how his uncle set out with just a briefcase and instructions to find new business. He says: "Neville had a number of contacts and started to develop a considerable amount of work in London in the early to mid-1950s. He then became involved in a lot of government work in the 1960s while father ran the business at home."

Overseas prospector
In March 1962, Neville set out on his first prospecting trip abroad, visiting countries including India, Pakistan, Japan and Thailand. That same year, he secured the business of the Australian Wheat Board and two years later the Australian Egg Board. Another important development in 1964 was winning the contract with the first Industrial Training Board, which was set up under the Industrial Training Act of the same year. The success of gaining the ITB paved the way for further expansion. Charles Packett says: "In those days, the vast majority of industries had to have a training board; you had to pay a levy towards training in sectors such as hotel, construction, engineering and offshore petroleum. Over a period of a decade, we ended up insuring the vast majority of the industry training boards."

Charles joined the company in 1972 as a junior clerk and Andrew came on board in 1977. By 1985, the company's workforce was 20 strong and its income split was approximately 70-30 in favour of commercial lines. By this time, just as in the 1950s, it became clear that the company needed to evolve as the government work began falling away. Charles explains: "It was at the time that my father and uncle retired and, in the space of three to five years, the large connections went. We were relatively new and had a good book of blue-chip clients but then there was a void and you could see a black hole. We thought we needed to concentrate quite distinctly on three areas."

Despite the disappointment of having to break with history, the brothers knew that its personal lines and life and pensions offering were not part of the way forwards and, over time, divested the firm of both. Charles says: "We could see what was happening, the way the market was turning; it didn't turn overnight but it wasn't our strength." Instead they focused on training firms, charities and SMEs. Andrew took on his uncle Neville's role with a remit to bring work through the door while Charles serviced clients as his father had. As the training boards were disbanded, private companies took their places and it seemed only natural for the brothers to develop that side of the business. It has continued to this day - is now called Trainsure - and insures over 300 training organisations from Lands End to John O'Groats. The brothers believe that the firm is now the largest provider of insurance to the training sector in the UK, providing cover in areas ranging from engineering and hairdressing to construction and retail.

Niche opening
Less obvious was the opportunity in the charity sector that Andrew spotted. One key contact moved from a training organisation to work for Guide Dogs for the Blind. The broker won the business and a niche book was established with clients such as St John Ambulance. Andrew explains that the broker has developed specialist products and unique wordings over the years, giving it a competitive advantage in the sector. He says: "They are complex accounts that we've grown up with and understand. The average broker going in now would glaze over. Once you have done one or two, you have credibility and can add bits to a policy: make it bespoke."

With nearly 200 clients in the charity sector, including royal colleges, institutes and federations, it is a niche the brothers are keen to build. Charles adds: "When we see new clients, nine times out of 10 we can improve what they have, either in cover, wording, premiums or service."

In SME, the broker covers clients in all sectors except heavy engineering and limits itself to premiums of £5,000 upwards. Despite the recession, the company grew last year and is forecasting growth in 2010. Both directors accept that clients have been cutting back on insurance but point out that, with a 98% client retention rate across the company and no debt, it has weathered the economic storm as well as could be expected. The co-owners are confident but not complacent about the firm's future.

Part of the process involved becoming a Brokerbility group company. The brokers believe the move has been a big help because of its efforts to source dedicated teams within insurers. Charles says: "Being in Brokerbility brings choices and options. A classic example is that we are not large enough to have bespoke health and safety people, yet I can ring a Brokerbility broker and employ their health and safety person for a client with no poaching or competition."

It is not just outside influences that the brothers believe have contributed to the success of the company. Every member of staff, many of whom have been with the company for over 20 years, is encouraged to sit exams with the Chartered Insurance Institute, paid for by the company. Andrew says: "We are only as good as the people who work here and we try to treat them as family."

As with its family ethos, independence is not something the firm is prepared to compromise on, even though "the phone rings on a regular basis". Just as in 1920, it is impossible to know what the next 90 years will hold but one thing is sure: with its highly specialised skills and the next generation of the family already within the company, it is a story that is worth following.

Sydney Packett & Sons
Directors: Andrew Packett & Charles Packett
Established: 1920
Number of staff: 35
Specialties: Charity and training
Location: Shipley
GWP: £12m

Source: Professional Broking – July/August 2010