Equity boss Neil Utley tells Andrew Holt how he turned the lumbering Cox giant into a broker friendly, go-getting business
Equity Insurance chief executive Neil Utley has come a long way since attending school with former Tory leader William Hague in Yorkshire. "William organised political debates and I organised the discos," laughs Utley.
Such self-effacement is a key quality of Utley's success. The man who made Cox Insurance, and then unceremoniously departed, returned last year to retain a grip on the company with a new brand and a new vision about where the business should go.
Since then "go" has been the operative word. For all his self-effacement Utley is very driven and has many ambitions for the group. He is looking to bolster his booming broker business by buying 15 businesses this year. "We are looking at long term drivers and long term relationships," says Utley.
Acquisitions will be influenced by the regional status of Equity's existing branches of JMW in Northern Ireland, Insureshop in the Midlands and Bennetts in the South, M4 corridor and the Isle of Wight. "We are looking at acquisitions within these areas, but if a deal came up with a number of already established branches elsewhere that can sustain themselves we would be very interested," says Utley.
This follows two recent acquisitions: Isle of Wight-based Tudor Wight Insurance Consultants and Hampshire-based Roy E Sansom's general insurance book of business. Three more are in the due diligence stage and a further handful are in advanced negotiations.
Gross written premium from Equity's high street broker network currently accounts for more than £60m of the total £160m broker business placed by the company, with the aim to push this to £100m a year within the next two years.
Utley is also looking at other product offerings. "We are looking at new areas of business such as SMEs and creditor insurance. Things that are currently on the fringes in a few years will be part of us," he says.
Utley is keen to stress that Equity's underwriting profit has outperformed the market by 15% over 24 years. Not a bad record.
But within the underwriting business is the Commercial Business Syndicate 1208 which has been in run-off since 2002 and the aim is for it to be no longer in the equation by the end of next year.
"Going back many years, Cox [Equity's previous name] was a good business with a lumbering, inefficient commercial side. That was changed and now we have more focus altogether," says Utley.
Equity's Syndicate 218 has more than £550m in motor premium income and is owned 64% by Equity and 36% by Lloyd's Names. As a motor syndicate, it needs to be a minimum of 85% motor to benefit from a capital requirement discount. "We are trying to get Lloyd's to change this but, as with most things involving Lloyd's, it takes time," says Utley. Equity is the largest motor syndicate at Lloyd's and more than half of its premium is from niche products like motorcycles, fleet and special risks.
But to maintain business growth you need the right people in place. Utley has been making key appointments to help boost the business. Last year Highway Insurance's chief executive Andrew Gibson was poached by Utley to take up the role of finance and operations director.
David Grant has recently been appointed as head of sales and marketing at underwriting arm Equity Red Star to develop relationships with brokers and boost the overall business.
Prior to this, ex-GAB Robins UK chief executive John Castagno took up the role of managing director of Direct Broking. This role, says Utley, is to deliver the group's growth plans within the direct broking market, including affinity partnership schemes, and spearheading the group's internet sales strategy. "Everything is falling into place and these appointments are great for the business."
This is being backed by a major advertising campaign, the first in the company's 60-year history. Utley explains why. "Some people ask us: 'Do you do motor?' And they honestly do not know. So although I thought everyone knew what we are about it is clear that there are some people we still need to reach."
Utley's buy-out of the old Cox business for £400m and conversion to Equity Insurance was achieved by venture capital backing. Duke Street has a 40% holding, Englefield also has a 40% holding and the remaining 20% is held by Equity's management. The arrangements with the venture capitalists is being dealt with "very well".
But Utley sees further venture capital backing being involved in the future of Equity. "Sixty per cent of deals like ours are refinanced, often with the same finance groups as were involved before," says Utley.
On Utley's vision and past form, Equity looks a good investment. IT