Shunning the internet and remaining loyal to the great British high street, A-Plan is going from strength to strength. The broker’s chief executive talks about the benefits of going against the grain
Many broker bosses are hungry for publicity. Not so Carl Shuker. After a bit of sweet talking, the chief executive of A-Plan finally agrees to be interviewed by Insurance Times – the first the company has ever done – but he tries to make the photo shoot a communal one: he doesn’t want to give his team the impression that he’s on an ego trip.
Shuker certainly doesn’t need to be modest. This year, A-Plan emerged from the shadows to become the highest new entry in the Insurance Times Broker Top 50. The firm’s accounts became public property for the first time, following the Barclays Private Capital-backed management buy-out of the company in 2008.
And the company has done this while, it seems, making very few enemies. It’s hard to find anybody with a bad word to say about Shuker. Even Patrick Smith, chairman of much larger personal lines specialist Swinton, calls A-Plan a “remarkable success story”.
This desire for a low profile was hardwired by the company’s founders, Tom Duggan and David Saville, who built up the business from a single shop in 1963 to 54 branches when they sold it two years ago. “Private but not secretive” is how Shuker describes Duggan, adding that Duggan is “very much a mentor”.
Oxfordshire lad Shuker has been with the company since he joined as a school leaver at the start of the ’80s. He worked his way up through the ranks to become Duggan’s deputy chief executive in 2001. Having served a “long apprenticeship”, Shuker says he is happy to have made it to the top job.
Shuker describes his erstwhile boss as “enthusiastic” and “great fun”, but also “very driven”. “He’s somebody who will never retire,” Shuker says. But while Duggan has been linked to a string of broker investment deals since the A-Plan sale, the Oxford-based company remains his baby, Shuker says. “It would give him massive pleasure to make a big success of what he started 50 years ago.”
Expect the unexpected
A-Plan’s business approach is certainly an unusual one. A-Plan is a largely personal lines broker trading largely out of high street branches and shunning the internet – surely a counter-intuitive route to success in today’s online business environment? “We’ve been counter-intuitive for the last 25 years,” Shuker laughs. And he’s got good reason to chuckle: A-Plan is in rude good health, opening new branches and posting impressive results.
Many of the branch locations, which are centred on the M5 and M40 corridors, were selected because they were no more than an hour’s drive from the head office in Oxford. The company is currently negotiating to open two new branches in Fareham and Guildford, taking the total number of shops above 60.
This geographical concentration is deliberate, says Shuker: “There’s a culture within A-Plan and it’s felt that to keep that, it’s important to stick to that general rule. But there are one or two other places that we might push the boundaries a little for if the right opportunity came up. We would look at it carefully.”
But while he is prepared to be flexible on A-Plan’s geographical footprint, he is not tempted to play on the aggregators. “When you look at the internet proposition, it’s self service and outsourcing to the customer. We don’t think aggregators give the opportunity to add value for the consumer or the insurer.”
Shuker admits that A-Plan’s customers lean towards an older age bracket. But he insists that the company is increasingly picking up customers from across the spectrum who are frustrated and feel let down after buying policies over the internet.
Customers are also more likely to tell the whole truth when dealing with a person, adds Shuker. “It’s more difficult to manipulate information when you are dealing with somebody face to face than on the internet.”
Staff knowledge of their local markets helps too, he adds. “By being in the local community, you know what the good risks and, more importantly, what the bad risks look like.”
“A lot of our staff have been with the company for a very long time and we invest a lot in them,” he says. A-Plan’s branch managers have been with the company for an average of 10 years. “We work very hard at building rapports and making friends with clients so that they feel they are part of A-Plan.”
A-Plan’s flat structure also means that managers are responsible for their branches’ performance.
On the day of Insurance Times’s visit, A-Plan’s head office is practically deserted, with just Shuker, his financial director and a receptionist on the premises. Everybody else is out in the branches, Shuker explains. But HQ is a lean ship at the best of times, he says: “The more layers you have, the more distant you are from the things that are happening at the sharp end.”
Playing the long game
Branch managers’ performance is benchmarked not on an annual basis, but on five-year rolling targets instead. “If you have annual target, managers will bust a gut to hit it,” says Shuker, explaining that managers can be tempted to hit their profit and loss targets by doing things that may undermine long-term performance.
“There’s no secret formula, it’s just about doing what we do well,” he says, “We have gone for long-term, sustainable growth, predicated on making sure that we provide value to the customer.”
But is it good business? Yes, Shuker says: A-Plan’s renewal rates are in the upper 80s, because, he argues, customers tend to give the company a second chance before taking their business elsewhere. “Quite often, we will secure business at £35-£50 more than the competition and we find that, despite the hardening market, that’s going up rather than going down.”
But how does the A-Plan approach square with the demands of its private equity majority shareholder BPC? “In terms of Barclays, they are really hands off, they don’t interfere; they are doing what they said they would do,” he says.
Shuker is “not bothered” by rumours that BPC will be sold off, as, he says, the same people would be running the business. But he is keen to up the
A-Plan management’s stake from the current 32%, in order to give every branch manager a share in the business.
“In an ideal world, we might buy out more of the shares for the team. This is a long-term plan. But the more successful A-Plan is, the more difficult it is to achieve.”
In the meantime, however, he comments that the visibility the firm has achieved through its Top 50 ranking has been good for internal morale.
It’s taken a long time for Shuker and A-Plan to emerge from the shadows, but it won’t be the last time we hear from them. IT