Keelan Westall chief executive Ashley Canning is dying to get into the Top 50 brokers' list and with his ambitious growth strategy, he may well do it Michelle Hannen asks him about his plans.
Four years ago, the senior management of broker Keelan Westall held some talks over future strategy. One item on the agenda, according to chief executive Ashley Canning, was the Insurance Times Top 50 UK Brokers & Intermediaries list.
Canning says: "We said, 'We want to be in that Top 50'. We had no real concept of what that meant but we wanted to do it. Each year I've looked at it with interest and thought, 'We're getting close to that 50 spot'."
Very close, in fact. This year's list ranks Keelan Westall at No 54, with brokerage for 2003 of £11.8m, a long way from the small business that began life near Woking in 1976.
Its development has involved flirtations with personal lines - it sold one book of personal lines business in 1989 and another book of household schemes late last year. But throughout its life, commercial property has been Keelan Westall's first love. "Essentially now we write only property insurance," Canning says.
Full steam ahead
Looking back on the early years, when the company had just six staff, Canning, who joined in 1990, says: "Although we felt we were doing well, it was quite sleepy."
But under Canning, who was promoted from deputy chief executive to chief executive last July, when founder Alan Westall took a step back to become non-executive chairman, Keelan Westall has grown into a business that is anything but sleepy. It now has 80 staff and hit premium income of £26m in 2003, with a £30m target by the end of 2004.
But Canning says that with the market softening more quickly than expected, achieving that target across a property portfolio that includes retail property, office blocks, and residential blocks of flats, as well as a small amount of heavy industrial, could be tough.
"The soft market arrived in September/ October last year - far quicker than we imagined it would. We set ourselves these targets anticipating 10% growth in premiums in addition to new business, and that 10% growth hasn't been there. In fact, it's almost gone the other way and we're starting to see it dipping now,"
Canning says. "If you keep your premium income levels the same as last year, some people will be quite satisfied with that. We're striving beyond that, but what it will be I don't know."
One of the major challenges in 2003 and so far in 2004, has been educating its clients, which include property investors, property companies and property managing agents, about the impact of FSA regulation.
Canning says with so many clients who are considered secondary intermediaries by the FSA, and little awareness among them about regulation, it is a task that has been "hard work".
"It has taken the focus away from the growth and the new business a little bit as we've had to cement our existing relationships."
Canning says that all of Keelan Westall's clients have either come to grips with the realities of the FSA and will become directly regulated, or have restructured their businesses in order to avoid regulation. Keelan Westall will have one appointed representative, but is not keen on establishing a network.
In line with that cautious approach, Canning says the company has large accounts with five or six major insurers, rather than utilising short-term capacity.
"We recognise that in order to get the right support out of insurers we have to support them to a certain level, so we can't spread ourselves too thin." Its biggest relationship is with Norwich Union.
A cautionary tale
He says the rise and fall of Independent Insurance proved a cautionary tale. "We flirted with (Independent) but we never really wrote a lot of business with them," Canning says. "When they eventually declined we saw it as a lesson."
He says the company is willing to talk to other insurers, but the focus this year is on building its existing relationships with Zurich and AXA.
By cementing long-term relationships, Keelan Westall hopes to more than double its premium income to £70m by 2008, and intends to become more aggressive in order to achieve it.
"We recognise that over the course of the next couple of years if we're going to reach our £70m target then we're going to have to continue this growth cycle," Canning says.
This will involve further development of the wholesale arm Keelan Westall established three years ago to sub-broke for brokers who are not property specialists, which now accounts for around £10m per year of its premium income, and though the company has not acquired in the past, it could also mean acquisitions.
"We're certainly in the position where we can jump. We have the finance in place to do that kind of thing." Canning says this may involve diversifying once again out of the property market, possibly into schemes or by acquiring books of business.
"We haven't excluded any possibility. We would be na've if we honestly though that we were going to get to our target just through organic growth," Canning says.
"Having said that, seven years ago we had a premium income of around £5m and I'd never have believed I'd be sitting here telling you we'd be up to £30m."
He soon may have a place in the Top 50 list to boast about, too.
ASHLEY CANNING BIOGRAPHY
Name: Ashley Canning
Age: 35
Career: After college, Canning spent three years in underwriting at Legal & General in Farnham. He joined Keelan Westall in 1990, progressing through the organisation until being appointed chief executive in July 2003.
Family: Married with one child and another on the way.
Interests: Golf, cricket and badminton.
