Software house boss Chris Guillame chooses his words carefully. But the Open GI chief executive is happy to talk about his determination to increase market share. The best way to do that, he tells Ellen Bennett, is to reach deals with the consolidators
Holding court in a room full of journalists, Chris Guillame seems at ease. The chief executive of leading software house Open GI since March, he is smiling, friendly and keeps telling the hacks round the table: “Ask anything you like.”
There is plenty to ask. The mega-consolidator Towergate bought Open GI for a whopping £280m in September last year. A few months later, Open GI’s founder Philip Bell stepped down from a full-time role, handing the reins to research and development director Guillame.
Now fully settled into his new job, Guillame has big plans for the company’s growth – and he will be up against fearsome competition as rival company SSP has just received £198m private equity backing and drafted in former Primary boss Jonathan Davey with a brief to expand the business.
With Open GI and SSP both currently hovering around 40% market share, it’s all to play for and, as a keen sportsman, Guillame will be leading from the front.
Despite his affability at the annual press briefing – his first – held in the backroom of a trendy Soho bar, Guillame’s relationship with the media has not always been easy. Later, in a private interview, he takes Insurance Times to task over what he believes to have been unfair coverage.
He has hit the headlines a couple of times since he took over the top job, mostly over suggestions that Open GI has attempted to raise its fees. The software house makes it money from transactions between the brokers, for which it provides IT platforms, and the insurers they do business with. It makes the bulk of its money from licensing its software to brokers, with the rest made up by transactional fees – charges levied each time a deal is done.
The first story that upset Guillame appeared in April, just weeks into his tenure, with the suggestion that the transactional fees paid by insurers had risen – in some cases, sources claimed, by as much as 300%.
“EDI charges [the charges made to insurers for issuing electronic documentation] have obviously been in the press,” he acknowledges now. “I would say widely misreported.”
So can he set the record straight? “No I can’t”. The charges are covered by confidentiality agreements, apparently. “We have got into a position where the deals are the same for all insurers, but I can’t go into those numbers.”
The charges made to aggregators for each successful transaction on a new platform developed by Open GI have also been in the press. On these, Guillame says: “We are amazingly cost effective for the aggregators compared to our competitors. Effectively, we only make charges when everyone else makes money, so we’re supplying our services free until someone else in the chain makes some money. We then take an exceptionally thin slice of that.”
“I must try very hard not to rest on my laurels. I think the biggest threat to the business is complacency.
Open GI has aggressive plans to increase its market share. It currently vies with SSP for the lead in the small but lucrative market, with Acturis, Insurecom and CDL bringing up the rear. Given such a narrow field, Guillame believes consolidation among the software houses is unlikely – but there are other ways to grow.
As well as develop business in the London market, he wants to up the number of regional brokers using Open GI’s platform. In the current climate, the best way to do this is to reach deals with the consolidators which control vast swathes of the broker market.
“I would very much like to be the preferred provider of all the consolidators...we work very hard to get our product offering into their plans. Some it works for and some it doesn’t,” he says carefully. “Part of our product strategy is to develop products consolidators will have as their preferred platform.”
So has consolidation been good for business? “We have grown our business top line and bottom line every year for the past nine years – that has been through consolidation.”
Open GI also has a trump card up its sleeve: its parent company is the ultimate consolidator and owns Broker Network, with its more than 200 members. Guillame admits that he would love to up the number of those using Open GI and says he has been in talks with Broker Network chief executive Grant Ellis about becoming a preferred provider. But he hastens to add that the two companies’ common parent would never insist upon its brokers using Open GI.
And what about that relationship with Towergate? When it bought Open GI, tongues wagged. A broker owning a software house was unheard of, and Guillame admits they were nervous about the impact on relationships with other brokers. “We have spent a lot of time going around allaying fears – which worked as everyone has stayed onside,” he says.
And the benefits are appreciable, if rather vague: “Towergate has got far-reaching insurer relationships that complemented the ones that we had as a software house. Part of its value triangle is about providing benefit back to its insurer partners. From that point of view, we are very strongly aligned.
“Joining those two strong sets of relationships could only benefit us.”
So what keeps him awake at night? Guillame is giving nothing away to the pesky press. Instead he replies: “I must try very hard not to rest on my laurels. I think the biggest threat to the business is complacency. If we get complacent about our market position, I think we would get eaten alive.”
If keeping complacency at bay is his biggest challenge, Guillame has little to worry about. But as the technology develops and the war for brokers opens on new fronts, this software house boss will be hoping to make the news for all the right reasons.