It’s all about controlled risks, says the broker boss as he sets out on a 110 km trek across the Arctic. He tells us about his fascination for the frozen north, and his role at the head of motorcycle insurance specialist, Carole Nash

Hungry polar bears, thin ice and -35C temperatures. Sounds scary, doesn’t it? But utter those words to David Newman, boss of the motorcycle insurance broker Carole Nash, and you’ll see a twinkle in his eye. Why? Because Newman is not your average broker chief executive – and that’s putting it mildly.

Speaking to Insurance Times before setting off for the North Pole, a relaxed Newman is deep into his training schedule for one of the most physically demanding and dangerous expeditions he has faced.

As you read this, Newman will be some way into his 110 km trek across the Arctic Ocean. It is his most daring challenge yet, and will raise money for charities Riders For Health – which works in Africa – and Basic (the Brain and Spinal Injuries Centre) in Salford.

Without a motorcycle in sight, Newman and four other explorers are taking part in a challenge dubbed ‘On top of the world’. Two weeks before leaving, this relatively new face to the broker market makes time to talk about his big ambitions for Carole Nash, its relationship with its major shareholder Groupama – and those sale rumours.

You have to ask why Newman is putting himself though this icy ordeal. “It’s something in my DNA,” he grins. “When I was a kid, I dreamt of going to Iceland. When I eventually did go, many years ago, I really loved it.

“When I put my foot on the ice, everything else goes away and I’m somewhere else. It is something that, for me, is very fulfilling – a place I feel calm in. I’ve done a lot of travelling but my real passion is the Arctic.”

The new boy

Newman took the top job at Carole Nash in September 2007, leaving his role as marketing director for Co-operative Financial Services for a stab at senior management. He is relishing the day-in, day-out battle in the broking community.

He admits: “Relatively, I’m still a new boy. I’ve only been in broking for just under three years. It has struck me that everyone is very friendly. Don’t get me wrong – it’s fiercely competitive, but I’ve learnt from a lot of people in the industry.”

Carole Nash was snapped up by Groupama in December 2006 from the Nash family for an estimated £80m, and is one of a trio of brokers owned by the insurer, which also has stakes in Bollington and Lark.

So what about those sale rumours? Last year, the company was subject to speculation that it could be sold by the French insurer. This forced Groupama Insurances’ chief executive Francois-Xavier Boisseau, also non-executive chairman of Carole Nash, to deny that the broker was on the market. Newman says he was surprised to hear the chatter. “Everything I see and hear is that Groupama is committed and that a sale is not on their agenda.”

Despite Groupama being the broker’s majority shareholder, Newman insists that there is no frosty relationship. He explains that, when he took his role, one of the key bargaining chips was that his executive team were given full control of the business. He insists that the insurer has been “very, very hands off”.

Newman says: “Effectively, we have two relationships with Groupama: one is with Boisseau as our shareholder, the other is effectively with managing director Laurent Matras, where it is the underwriter and we’re the customer and it’s a business-to-business relationship.”

The insurer does hold him accountable for results, however. And Newman says 2009 “wasn’t a disastrous year, but it was a challenging year” for the business, and the motor market generally, after Carole Nash posted a fall in pre-tax profits to £6.17m (2008: £7.6m) on turnover of £24.2m (2008: £24.9m) for the year ended 31 December 2009.

Newman says that while margins held up, volume fell slightly because of a 1% fall in the bike park for the entire market and lack of new bikers. “It’s surprising, because in a recession we thought that you might have seen more people go from four wheels to two wheels, or new entrants into the market – youngsters getting two wheels before they bought four wheels – but that hasn’t come through at all.” He says that, year on year as of January 2010, like-for-like sales were down 45%, and rolling year was 27% down. He also claims the business was hit by poor investment income, but adds: “Overall, we think we have put in a solid performance.”

Deal ready

As the motor market fights on price amid pressure from online, Newman insists that he has no plans for the Carole Nash brand to appear on aggregator sites, with the exception of its classic car business. “We don’t want to go on to the aggregators at this stage because our research shows that we are pretty well-known in most of our target bike markets.”

But Newman is keen to snap up unwanted books of business from brokers, and is ready to do deals. He claims that Carole Nash, which is based in Altrincham, Cheshire, and employs more than 300 staff in the UK and Ireland, has a market share of about 23%-25% in the UK motorcycle market, and about 50% in Ireland. He is respectful of his aggressive competitors, which include Bennetts and MCE, admitting that “everyone wants to take on Carole Nash”.

As the planned expedition to the Arctic proves, Newman relishes a challenge. Even so, he is alert to the risks that such a trip poses, and he has agreed to a management succession plan, just in case. “There are elements of risk – I believe they are well-controlled risks – but the Arctic sea is a dangerous place. It is only right that if I were to break a leg or, worse still, not come back at all, that business continuity needs to be assured. Not that I’m planning on that!”

To find out more about Newman’s trip, and how to sponsor him either as an individual or business, visit IT