In what have been some challenging market conditions, when a broker is able to report that its revenues have leapt by around 13 per cent it’s sure to capture attention and provoke the question as to what is behind the success.
That’s why Insurance Business UK
sat down with Chris Elliott, chief executive officer of Tyser & Co Ltd, to discuss the firm’s recently announced financial results – which saw it generate revenue of £46.8 million during 2015, up from £41.3 million in 2014, while reporting earnings before interest, tax, depreciation and amortization of £9.4 million, up from £8.2 million the previous year. He talked about several challenges in the industry that brokers must be alert to.
“There are three segments to the market – there’s the core underwriting business, the MGA platforms and then there’s the brokers,” he said. “As part of the HBH Group, we have a separate regulated MGA platform called Aquila, which has grown quite substantially and has six up and running MGAs. Tysers doesn’t really supply much business to them, they are separate entrepreneurial platforms sourcing business from a number of brokers in the market.
“The grey area is whether the bigger platforms that you see are really just trying to become underwriting platforms or whether they’re going to stay as MGAs. That’s a big challenge going forward – because everyone is chasing the premium.
“The underwriters are responding to concerns that the brokers have too much control of the distribution so they are spreading out around the world; and the threat is that the broker will get cut out because they’re not providing any value. So we want to make sure that what we give our clients is a really good offering.”
Tyser has built its reputation for more than 200 years and operates internationally across four practice groups: non-marine, international, reinsurance and marine and specialty. However, for smaller brokers Elliott recommends finding a niche and sticking to it.
“If you’re good at something you should focus on that – and then it can often lead you to other areas,” he said. “A lot of people have pulled out of UK retail and pulled out of aviation because they’re very difficult to make money in.
“We’ve focused ourselves while still trying to be nimble. If we’re going for an account we put a lot of thought into the pipeline. We think about who is going to work on the account and get the best people for the job.”
For Elliott too, another key factor in a broker’s success is a willingness to embrace new technologies and move with the times.
“Technology can help in many ways,” he states. “Firstly, from a compliance point of view – many people get bogged down in compliance with the associated costs, but with some of the systems and controls we have in place you’re naturally getting a level of comfort about how things are done without using as many manual resources.
“In addition, we have a common system that is used across Tysers - this makes reporting easier and delivers information to both management and divisional heads on their book of business to help them closely manage their relationships and pipeline. We are also supportive of the need to modernise the London market where it adds value to our clients and we consider the impact of these plans as part of any future changes to our own IT systems.”
So are there any additional secrets behind the success?
“I’d say the key to our success has been a workforce that’s hungry and keen,” he said. “Now we reward people with a reasonable salary and bonuses and dividends. People like working here – we’ve been very good at retaining people.
“We work with and support like-minded independent brokers across the world - even though people say they are a dying breed, there seem to be many left. And because of this we have been able to build our reputation, which in turn allows us to deal with some of the bigger names.
“You’ve got to look after your clients,” continued Elliott. “They can cost a lot to get initially because you can prospect them for a long time and not have any success – so when you’ve got them, look after them. Don’t take your eye off the ball: yes, you’ve got to be on the lookout for new clients, but don’t stop treating the ones you have well.
“Remember that people want some sort of personalised service when they’re spending their money. If you can give a personal service, they value this.”
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