‘A ham sandwich should be able to run our company at the moment’

Arron Banks is having none of it. Moments before the Insurance Times interview, the Brightside chief executive is letting rip at one of the hotel staff over poor service.

Banks is charming, imaginative and good-humoured, but as this incident demonstrates, he’s also a fighter, not afraid to push the boundaries and put noses out of joint if he feels there’s been an injustice.

The fighting qualities are evident in his companies. Last month, Brightside’s sister company, Gibralter-based underwriter Southern Rock, accused its former claims handler, Endsleigh, of secretly pocketing referrals. It was the latest twist in a £15.5m court battle, with Southern Rock alleging money was lost through inadequate claims handling. Endsleigh vigorously defends the case. Understandably, the normally chatty Banks is tight-lipped about it.

Accompanying Banks’ pugnacious spirit is a tremendous energy that has transformed Brightside from a small-time van broker above a bakery into an Insurance Times Top 50 broker.

Straight out of school, Banks began his career as an office junior with Amlin in the underwriting department in London, working on catastrophe risks. He was later farmed out to help regional office openings in Peterborough and Basingstoke, where he worked on UK motor.

After brief stints at Aviva and Berkshire Hathaway, the experience in motor gave him enough confidence to leave the corporate world. With typical candour, Banks explains his decision to go it alone. “It was the futility of it all. You see stuff being done that is just nonsensical and idiotic; in the end it gets you down. I was always within an inch of getting the sack from everyone I ever worked for because I was a bit pushy, controversial and outspoken.”

Banks found a little office above a bakery in Thornbury, Gloucestershire, to broker motorcycle insurance and within a few years, the company, called Motorcycle Direct, was big enough to sell to A-Plan.

Banks went back to the office above the bakery “to recreate the karma”, as he puts it, with his next idea. Using the cash from the Motorcycle Direct sale, his vision was to become the Direct Line of van insurance by eventually selling through call centres and the internet. Commercial Vehicle Direct quickly expanded into virtually every line of business.

He recalls: “We used to have a white board. It was like the Battle of Britain. If we got seven policies, we thought ‘let’s go down the pub at eight o’clock and have a big celebration’.

“Then it started to go into double figures and we thought we had made it, but it just seemed to carry on and carry on.

“The first two years were the most fun, because we didn’t have all the tedium of running a big business.”

The next big step in the journey was the flotation, where there was a reverse takeover of listed Brightside. Since floating three years ago, Brightside has grown in market capitalisation from an initial £20m to its current worth of £120m.

The expansion has been rapid and the adventure even greater, with some audacious, headline-grabbing moves. Two years ago, Banks mooted a takeover of Jelf, believing a potential merger could substantially enhance shareholder value. Eventually, private equity stepped in to invest in Jelf.

Then, earlier this year, Brightside hooked up with private equity to eye a takeover of RAC. The idea was that Brightside would run the financial services side of the business, with the roadside pick-up arm largely taking care of itself under the guidance of the investors. In the end, RAC was sold to a rival private equity bidder.

Banks is bold, imaginative and opportunistic, but what value can Brightside really add? Banks sees it simply enough: Brightside is the king of cross-selling and could help any business.

“You can’t just have motor insurance as a one-off product. You’ve got to relentlessly sell motor, home and van cover. Everything we do has a very big cross-selling element to it,” he enthuses.

“Cross-selling is the Holy Grail and it’s what most people do extremely badly. If you look at the RAC and Aviva deal, the original idea was to cross-sell the database, which they demonstrably failed to do.”

Citing Brightside’s premium finance business as an example, he continues: “We lend something close to £100m to our customers. That’s a million pounds every three days. A lot of brokers use a premium finance provider, so we thought it was worth setting up a company to do it ourselves.

“Now we’ve got medical reporting. At every stage, we’re tying to generate revenue out of the policy. If you are going to be successful, you’ve got to be good at doing that.”

When Banks gets going it’s infectious, the chat frequently punctured by chuckles and loud laugher. He is also strongly opinionated, offering the antithesis of typical corporate speak.

On referrals, he opines: “It’s not realistic. If you ban referrals, insurers will move to profit-based models that mean they don’t have a referral fee but own their own law firm. I don’t see what the difference is. It’s a storm in a tea cup.”

So what’s next for this larger-than-life character? Banks bubbles with excitement at the thought of expanding eCar and eBike, which the online motor broker bought for £34m in May last year.

“I’m very excited about the eCar project. Interim results will be stand out. They should be. If the average premium has gone up from £450 to £700, a ham sandwich should be able to run our company at the moment,” he chuckles.

But never mind business, today it’s all about tennis and he’s in London today to watch a match. “Roger Federer is my favourite player. I like the way he strikes the ball. He just seems to sweep it. Very graceful,” he says, with some admiration.

Banks is also a dab hand with the racquet. In a few days, he and his sales director John Gannon will take on former Wimbledon champion Virginia Wade in a game of doubles.

It promises to be a game full of thrills, spills and drama, although for Wade’s sake, let’s hope Hawkeye is in action to settle any point disputes.

Snapshot: The man

Age: 45

Hometown: Thornbury, near Bristol

First job: Assistant underwriter with Amlin

Family: Married with three children

In his own words: ‘I was always within an inch of getting the sack from everyone I ever worked for because I was a bit pushy, controversial and outspoken’

Ranking: UK’s 29th largest broker

Revenue: £66.2m

UK offices: 4

Employees: 674

Market view: Opportunistic, entrepreneurial and growing healthily. Brightside is not afraid to rattle the cages of rivals in its efforts to be top dog