Broking Success - Macbeth: Laser-focused on service

Paul Macbeth started in the profession at 14, working as an office junior at his dad's company, Macbeth Insurance Brokers, after school. His father, having worked in insurance all his life, started the company in 1992, focusing on high net worth and commercial business.

Paul's father worked as a sole trader in the front room of his parents' bungalow before taking on high-street premises that the company still operates from today in a suburb of Reading. In 1994, Paul joined the company full time but tragedy struck in 1996 when his father was killed in a car accident.

The accident was traumatic for Paul and had serious implications for the company too. Paul remembers: "The guys were left to pick the business up; I was only a trainee. They formed a limited company and my stepmother remained the majority shareholder. We managed to keep growing but never massively."

In 2005, the company started withdrawing from standard personal lines. Macbeth says: "We found that we were quoting for everything but asked ourselves 'are we focusing and making money or doing it for the sake of it?'" They also withdrew from micro-business insurance. He continues: "We knew that the banks, the direct insurers and online insurance were all coming, so we took the decision to move our focus to bigger clients."

Crossroads
MIB stayed in commercial and high net worth lines, retaining the same ownership structure until 2007 when Paul and his business partner, Tony Gibbs, keen to focus even more clearly on specific sectors, decided to buy out the other shareholders. They now own the business 50:50.

Macbeth explains: "We were at a crossroads. We were running the company but it was a difficult situation to be in because we couldn't do what we wanted."

Prior to becoming managing director, HNW accounted for only 20% of income: it has now doubled to 40%. He says: "We saw a lot of opportunity because there was less competition; we didn't feel there were any brokers in this part of the world that were trying to promote private client business."

The company noticed that people found it hard to buy insurance for jewellery and watches in isolation; by using search engine optimisation and pay-per-click advertising, it began to generate a lot of leads. Macbeth remembers: "Clients would come to us and say 'I've bought a £30,000 watch'. We would say 'if you want to insure it on its own we will recommend you to another company, though did you know there's another way?'"

Informed
Macbeth believes that the public is not educated about HNW insurance. While he praises Hiscox for raising the industry's profile, he believes there is still a further role for education. He continues: "Most of our private clients are new to HNW insurance, not necessarily new to money. It is our job to educate them: it is better cover, far better claims service and competitive premiums."

The majority of the broker's income comes from arranging insurance for businesses with £1m-£50m turnover. It offers a range of products including property, motor fleet, professional indemnity and cyber liability. Whereas the internet has given it a UK-wide reach in high net worth, most of the commercial business is located in London and the Thames Valley.

Working electronically is critical to Macbeth. He says: "A lot of our insurers like the way we do business electronically through Acturis, Iprism or their own systems. If you are going to write office business for £500, it has to be transacted instantly: the bottom line is time."

Macbeth's positive approach and determination are impressive. Most of the broker's biggest accounts are with the niche specialist insurers but it is the quality of relationships, the attention to detail, that he praises. In commercial lines, he cites LV and Fortis, while Hiscox, Oak and Home & Legacy are similarly highly commended. He sums up: "You get to build good relationships [with them] because their staff turnover seems to be low and they have good continuity."

In particular, Macbeth singles out the ability to speak with decision makers: "Along with technology, you need the ability to pick up the phone and get hold of an underwriter."

Paperless
Hand in hand with his belief in electronic trading comes the company's paperless office status. MIB took the step in 2004 and has not looked back. Macbeth says: "We were heavily laden with paper and had run out of space; it enhanced our service and, although there was a big outlay on scanners, there have been long-term cost savings."

Every document is available to staff and, with a recent move to an Acturis system, employees can now work anywhere. Macbeth confirms that plenty of brokers have been interested in how to implement such a system and some have even visited the office to watch it in action.

Sharing information is a key quality for Macbeth. He admits to being a workaholic and says: "I'm a real brain-picker in and out of the industry. Someone always has a bit of advice that you don't know about." He ascribes the company's success to the hard work of making key contacts by going to several breakfast meetings a week and even more evening functions, though he is keen to stress that it is a team effort: "We have to make sure we have the right team in place with the right experience because, if our service dips, we might as well shut up and go home." Training is essential for MIB, with everyone encouraged to sit ACII exams paid for by the company.

MIB is an accredited Investor In People and has Chartered Broker status. Macbeth points out that the latter is not something just achieved, put on a letterhead and then forgotten about.

He says: "It is one of our unique selling points when networking and communicating with clients."

Acquisitions
Another aspect that Macbeth feels the broking community needs to develop is its charging structure. Since forming, it has charged an administration fee to clients. He argues that, without it, the business could not give such a high level of service. He says: "We are completely transparent and upfront. Clients pay fees to their other professional advisers and that's what we are; we're not salesmen trying to flog them a product and so we charge for it."

Since becoming owner, Macbeth has worked closely with a coach who he praises for helping him step outside the business to take a strategic view. He is already planning an office move in 2012 to double the company's space and is looking to grow business income by 130% over the next five years.

He knows that the company will not get there organically: "It will certainly involve one acquisition, if not two." The target will find that enthusiasm and innovation are not in short supply.

Macbeth Insurance Brokers
Managing director: Paul Macbeth
Established: 1992
Number of staff: 6
Specialties: Corporate, high net worth
Locations: Reading, London
GWP: £1.7m

Source: Professional Broking – September 2010