Be Wiser chairman Mark Bower-Dyke talks about his plans to return the business to growth
Be Wiser is planning to make a foray into broker acquisitions to grow the business.
The broker took a range of business actions last year, as intense competition was blamed for the firm posting a £2.2m loss for the year up to May 2018. This was chiefly due to a 20% fall in turnover.
Chief executive Mark Bower-Dyke said the business is now back on track and looking to grow. To boost policy count in the year ahead he has invested over £2.5m in new customer-facing AI technology, due to be delivered by CDL by the end of October.
But Bower-Dyke explained that in current market conditions, acquisitions were the main way he could see of growing his business at the sizable rate he is looking for.
“In the heady days of our organic growth we were growing at 25-30% a year,” he said. “But in this market, until someone exits, it’s going to be a slow process and we’re trying to expand a bit quicker than that.
“Because the organic growth is tight, we see acquisitions as being a part of our growth strategy.”
Coverbox
Be Wiser completed its first ever acquisition in July when it bought the 10,000-strong customer base of telematics broker Coverbox after it fell into administration.
Bower-Dyke told Insurance Times that Coverbox was a “good test to find how good or bad we are at acquiring” and that the plan was to complete more deals.
Bower-Dyke revealed he has been approached by several third-parties and private equity houses offering investment to fund these deals. But another option he is considering is an IPO.
“With the right brand you could IPO it quite easily,” he said. “Be Wiser is the fifth or sixth most recognisable brand in UK motor.”
Bower-Dyke said there was interest in brokers “on the small and large scale” and that any acquisition would be rebranded under the Be Wiser banner.
In the competitive motor market he said a lot of brokers are struggling, and that merging under a strong brand was way to strengthen their business.
Compared with a few years ago, he said there was much more to be gained from completing an acquisition.
“The difference now is that technology is much better,” he said. “You have the ability to put any platform in underneath your own so you don’t have to go through the ache of trying to change their computer systems, which can wreck a business.
“You’re able to take what they’ve got and just enhance it.”
Integration strategy
But he said the acquisition model would be different from those seen from consolidators in commercial lines, and would be about building the businesses rather than focusing on cost savings.
“There is a huge space in the market for us to take this forward,” Bower-Dyke said. “We’ve done a lot of work on governance and structure to make sure we have the ability to deal with a much larger number of customers.”
But while Bower-Dyke is looking at personal lines brokers of all sizes, he showed less appetite for acquiring an MGA.
“Where you’re trying to supply product to your own carrier it’s like being the gamekeeper and poacher at the same time,” he said.
“I’m much more a believer in proper and long-term relationships with experienced underwriting carriers that can do it properly.”
But acquisitions are not the only way Bower-Dyke is looking to return to the business to growth.
Technology
While he said a well-run personal lines broker can survive without resorting to acquisitions, he said this was not the case if they fail to implement new forms of technology.
The new technology at Be Wiser is set to use open source data to significantly reduce question sets at the point of buying a quote. It will be able to provide an immediate quote with just a picture of a driving licence and car and will communicate with customer through an AI chatbot.
Be Wiser has recently relaunched its website ready for the new quote engine.
Bower-Dyke explained it will simplify and speed up the process of purchasing an insurance policy.
“You can be on an aggregator at the moment for ten or fifteen minutes filling in boring questions. It’s a stupid journey.” he said. “When you have a claim everything is now done instantaneously. You don’t fill in forms anymore, you don’t do anything.
“But at the front end it’s not like that – it’s ridiculous and we should be making it easy all the way through.”
Staff cuts
As part of Be Wiser’s actions to get the business back on track after the losses last year, Bower-Dyke sought to reduce expenses, and cut the number of staff from around 650 to 600.
He revealed since then staff numbers have reduced by another 100 as the business has mechanised parts of how it is run. But he insisted the implementation of new technology from October was not motivated by cost reduction.
“The use of databases cost money, so the overall expenses I doubt will reduce,” he said. “All it will be is the expenses in different areas will change.”
He said staff roles will change to manage the new technology, but with a plan to grow the business through acquisitions, he said the overall number of staff will rise.
“After October I don’t see a reduction in our staff because what I’m hoping for is growth in the business, so it’s just a change in what they will be doing,” he said. “Our platform, if we are going to achieve what we want in adding things onto it, has got to be robust and strong enough to cope with doing that. The only way you are going to do that is by making it more efficient.”
He said that humans and ‘organic intelligence’ will always have an important role, and that the implementation of this new technology presented opportunities for staff development.
“Robots can’t take over everything because someone has to control them,” he said.
“So the big winner here is organic intelligence because the more you mechanise, the more its needed to ensure everything is working properly.”
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