Chief executive reveals that the claims-focused business plans to ‘up our game’ when it comes to acquisitions next year

End-to-end claims management portfolio business Handl Group has ringfenced “digital transformation and collaboration” as its “two big points for next year”, according to chief executive Graham Pulford.

For him, digital transformation in particular is “one of the big ticket items for next year” following the firm’s appointment of Neil Vose as head of digital transformation earlier this month (November 2021).

Although Vose is still compiling his action plan – and Pulford is waiting to hear how much this project work will cost – the chief executive told Insurance Times that this type of investment is “important for us as a business to grow”.

He explained: “We’re going to be spending quite a bit of money on looking at how we deal with our customers and how we deal with our customers’ customers to make that a much easier journey.

“We’ve got to take that whole digital transformation strategy and roll it out across our groups and that will really help commercially because people like dealing with businesses that are easy to deal with, but the customer journey will improve for the individuals along the way.”

Particular areas of focus, noted Pulford, will be the clinician booking process and how this links with the wider supply chain – Pulford described the group’s current systems here as “clunky” and in need of a refresh.

“To me, digital transformation isn’t just about making a whizzy app or a front-end thing – it’s more than that. It’s looking at re-engineering the process to make sure that end-to-end, we digitise anything,” he said.

‘Flavour of the month’

Alongside this digital transformation focus, Pulford said Handl Group’s second overarching “theme is collaboration”, closely linked to “flavour of the month” alternative dispute resolution (ADR) solutions.

Pulford said ADR is getting more traction in the market following Covid-linked court backlogs. He explained: “[The UK has] reopened the courts now, but now they can’t process the current work and the backlogs, so they’ve got to open up further courts to actually get through that.

“My view is that the whole legal fraternity has to deal with it via ADR of some form because otherwise, no one’s going to get anywhere quickly and the person that gets affected most is the claimant.”

With this in mind, Pulford said Handl Group next year wants “to collaborate with the industry, collaborate within our own brands and we want to collaborate with other best of breed partners”.

He added: “Moving forward over the next two years, it’s going to be more collaboration, which is really interesting for us.”

A new acquisition ‘sweet spot’

Supporting its collaboration ambition, Handl Group plans to build on the investments it has made this year to further its acquisitional growth in 2022 – in particular, the firm is targeting larger claims management and rehabilitation businesses to create “transformative change within Handl” and build scale, which will help the company deliver end-to-end claims processes.

So far this year, the organisation has spent £6m buying expert witness reporting firm Tessa Gough Associates and brain injury rehabilitation business Reach Personal Injury Services. It has also invested in credit hire startup Cogent Hire – led by former Credit Hire Organisation chair Kirsty McKno – and psychological rehabilitation company Mind Right.

Pulford described this M&A activity as “strategically wise to do” due to a Covid-induced “downturn in other areas”, which provided “a bit more bandwidth to look at some of these further companies”.

For next year, however, Handl Group plans to “up our game” when it comes to acquisitions.

Pulford explained: “Our sweet spot has been smallish companies, £2m to £3m, so we’re going to up our game now that we’ve proven we can do it well and go after some bigger companies. That’ll create transformative change within Handl.

“The cheques we’re going to have to write are £10m plus firms - that takes you into 300, 400 employee type firms.

“From our point of view, it’s about scale [and] creating that ability to service large amounts of work. We want to be able to get the bigger insurance contracts and to the only way to do that is to buy yourself into it because insurers won’t give you a contract [if you have to subsequently scale to fulfil it].”

Acquisitions also have to help join the dots between Handl Group’s existing network of brands, Pulford added, contributing to the end-to-end claims service model.

“That’s part of the acquisition rationale,” he said. “Any company we put in the group needs to feed at least one of the other companies or be a customer. Every business is related to a different one.”

Businesses joining the group also have to be “transformative” and have a great management team, Pulford added.

Despite the appetite for M&A in 2022, Pulford hasn’t yet put a number on the amount of deals he’d like Handl Group to secure in the next 12 months – in part, this is due to the time-consuming preparatory groundwork.

He explained that this year, for example, Handl Group researched 800 firms for potential acquisition, before whittling this down to a shortlist of 30 businesses. After contacting the companies in question, the organisation made four acquisition offers, with two being accepted - Tessa Gough Associates and Reach Personal Injury.

Handl Group’s portfolio currently includes:

Advanced CCA, Claimspace, Cobalt, Cogent Hire, Coplus, Corpore, Handl Communications, EQL, Foresight, MLA, Harrison Associations, Mind Right, Tessa Gough Associates, Reach, Speed Medical and The Treatment Network.

Claimant lawyer consolidation

One concern Pulford has when looking ahead to next year is the consolidation and behaviour of claimant law firms operating in the personal injury (PI) market post-whiplash reform.

Since the launch of the Official Injury Claim (OIC) portal in May 2021 and the general downturn of cars on the road due to Covid-19, Pulford believes a lot of personal injury law firms will pull out of this market, leaving “10 firms running the whole of the claimant PI market”.

He continued: “What we see is a lot of the smaller claims handling and rehabilitation businesses are struggling right now because of the reduction in claims numbers in the areas that we work in.

“The big trend [next year] will be in the claimant lawyer changes. We will see most people pulling out of claimant lawyer motor because there’s no money in it.

“The other side of it, which is a negative for Handl, is where people need physio if they’ve had a whiplash injury, claimant lawyers aren’t particularly pushing that anymore because they don’t make any money out of doing it. They used to make a few quid out of doing that but that’s all been taken away. Our natural physiotherapy numbers are disappearing.

“Big firms still do it anyway because they know they’ve still got a duty to their clients. But the smaller firms are saying ‘don’t worry about it’, even though these guys are injured. We’re seeing that slowly creeping in.”