Our IT Pack event in Brighton gave new brokers a chance to share views on industry challenges with their peers and senior executives. On their minds were building a career in the long term and predicting the future shape of the market, while battling with dual pricing to turn a profit today

A holiday atmosphere held sway at the latest IT Pack gathering in Brighton. Brokers basked in late summer sunshine while tucking into a barbecue in the Royal Sovereign’s beer garden. But not before they had tackled some the most pressing issues and challenges affecting the broking world.

The discussion began on a lighthearted note when delegates chatted about their route into the insurance industry. For Matthew Imber from GM Imber & Sons, broking was a family affair. “My dad set up a brokerage in the 1970s,” he explained, before adding that he and his two brothers took over the business in 2006.

Meanwhile, Nick Oldridge from PCM Risk Solutions conformed to the industry stereotype of “falling” into insurance when he was offered a job during his gap year. “I said ‘Why not?’, and I’m still there five years later,” he grinned.

Aviva account manager Sarah Brangwyn revealed that she had only met one person in the industry who had made a long- term plan to enter insurance. However, despite studying law, Chris Milnes from Heath Lambert insisted he had set his sights on broking after deciding the legal sector was not for him. “I was looking for a career rather than just a job,” he said.

Recruitment was a serious issue for Scott Jeffery from the Bluefin Group, and one where he felt the insurance industry was falling short. He believed there needs to be more investment in attracting bright young graduates. “The industry needs to compete with investment banks, law firms and accountancy for the best young brains. The industry should be much more imaginative in its appeal to potential recruits. It is significantly more interesting than many of the employment avenues that these people choose,” he said.

The delegates were keenly aware of the growing importance of qualifications within the industry. The majority had taken a CII exam or were planning to. Towergate’s Michael Wood had just completed his first exam, while Milnes said the need to have qualifications was “pushed quite heavily”. He expressed doubt over the qualifications’ marketing value when it came to acquiring new business, however. “Clients don’t know what it is. It is of more value internally,” he said.

The five-year plan

Many participants were already highly focused on forging a long-term career in insurance. Oliver Smith from Stonebridge Corporate said: “In the next five years I hope to be running a sales team or a satellite office, controlling a large book of business, looking to build it up to a total of £1m commission earnings. Within 10 years, I hope to be promoted to a director’s role, managing one large team or several smaller teams beneath me, while still concentrating on new business. “

Tim Baxter from Heath Lambert was also determined to make his mark. “In five or 10 years’ time, I see myself within the insurance industry working within the broking or business development area as a senior executive.” Elsewhere, Jeffery was open to different possibilities. “I would like to be either a sales director for a national broker or possibly even move to an insurance company and take up a new business or development manager type of role,” he said.

However, despite their determination, they were fully aware that brokers are going to be faced with an increasingly tough market. Pricing emerged as a major concern. Baxter said: “Price is always a challenge. However, it is even more so at the moment with the rise of comparison websites. For brokers it will become increasingly difficult to compete.”

Jeffery added: “One of the biggest challenges we currently face is, quite simply, making a profit. Dual pricing means it is harder than ever to retain existing clients, and business is just walking out of the door.”

Direct competition

The delegates were conscious that the direct route was proving to be a growing threat. Smith pointed out that Direct Line was now writing complex commercial risks, cutting out the need for brokers. “With insurance rates set to go up in 2010, these direct insurers and agencies will be able to offer the most competitive terms in the market,” he said.

Milnes argued that brokers needed to differentiate themselves to stand out from the competition. He pointed out that charging fees rather than basing earnings on commissions presented a more professional view of a broker. Elsewhere, Jeffery viewed full disclosure of commissions as vital in moving the sector forward. “Disclosure provides everyone with the facts on which to base management decisions. When you add the positive effect disclosure has on confidence, it can only help the industry,” he said.

Smith also anticipated that smaller brokers would continue to be swallowed up by the consolidators. “I see more and more smaller, regional brokers buying into or being acquired by broker networks in a bid to obtain larger market power and higher earnings through increased commission levels, leaving just a small number of independent regional brokers and a number of super brokers who will rule the marketplace.”

But Smith added that the end might be nigh for some broking giants. “There could be a collapse of one or two larger broker networks or consolidators due to borrowing large amounts of money before the collapse of the financial market and now struggling to repay those loans.”

The feedback from the day was overwhelmingly positive, as delegates seized the opportunity to network and share perspectives. Aviva’s head of e-development and delivery, Andrew Halliwell, said: “A very good cross-section of broker delegates attended. It was encouraging to see that the guys were very switched on.”

Jeffery added: “The discussions were very honest and involved views shared from a diverse group of brokers. These ranged from independent brokers and niche markets to the larger nationals. Everyone had a slightly different take on how to handle the current conditions.” IT

How I made it: Andrew Halliwell

Andrew Halliwell is Aviva’s head of e-development and delivery. He is responsible for implementing and maintaining Aviva’s products, prices and underwriting rules on electronic systems. He said: “It’s a fast-moving area with lots of pressure to deliver things faster and better. I love it.”

Halliwell joined Aviva as a commercial underwriter straight from school. He has since worked in marketing and product development, pricing and training. “I’ve been very lucky to have had the chance to fill many different roles over the years,” he added.

Explaining his success, Halliwell said: “I was never overtly ambitious. I’ve always thrown myself into whatever I’ve been asked to do and hoped the results would speak for themselves. I’ve always been flexible and happy to change roles. In the early years, I built up a deep understanding of the business, backed up by CII exams, and the breaks started to come as I was seconded onto IT projects as the ‘business expert’.

“It was great to see your ideas going into IT developments that are used by so many people. My last promotion was given to me when I worked for John Kitson, our head of sales and marketing, who is very inspiring, although tiring, to work for. Blending business and IT aspects is ideal for me.”

Halliwell added that he has learnt from a number of role models throughout his career, some of whom gave him essential tips. “In the early days one manager suggested I got my hair cut if I wanted to progress. After all, it was the late 1970s. So that was good advice. There have been many influences on my career and I think you can take something positive from everyone you work with.”

He also offered the delegates some advice for getting ahead. “Enthusiasm and doing what you say you are going to do, ie delivering, are two of the basics,” he said.

“Also, be true to yourself, challenge people and ideas, but do it constructively. Understand where the company is going, be clear what your role is and put 100% in. Keep learning.”