Despite its annual premium eroding by 65% during the Covid-19-related lockdowns, the business is now ‘on track’ to achieve 30% ahead of budget

BrokerFest 2021: As a “financially young” business, commercial wheels broker McCarron Coates was concerned that it didn’t have the cash reserves compared to bigger brokers to withstand the Covid-19 pandemic. However, despite it being difficult at times, the national lockdowns “highlighted our capacity to adapt” and find other areas for success, said the broker’s director Ian McCarron.

The broker was established in 2018 by current directors Paul Coates and McCarron, with a focus on transportation insurance solutions, particularly in bus and coach commercial lines. Luigi Maggio joined as the c-suite’s third musketeer June 2021.

McCarron was speaking exclusively at Insurance Times’ BrokerFest 2021 conference on Monday 11 October, in fireside chat session titled ‘Battling through the pandemic: A broker’s story’, chaired by editor Katie Scott.

Pre-pandemic, McCarron Coates had managed to double its business within its first 12 months after securing a seven-figure client, alongside 125 clients in fleet. By the end of 2019, the broker had helped insure around 3,500 buses and coaches – contributing towards £10m of annual premium.

However, following the national announcements in March 2020 from prime minister Boris Johnson, which confirmed lockdown regimes to mitigate the spread of coronavirus, McCarron Coates was forced to “put the brakes on” its growth ambitions because the transportation sector had “ground to a halt”.

Because of having “such a sector-specific approach”, McCarron told delegates that the early days of the pandemic “scared” the broker because Johnson’s lockdown announcement had such a “devastating effect on the industries that we work with”. This saw the broker’s annual premium erode by 65% - dropping to £4m.

A further challenge was that bus and coach firms did not qualify for government funding support because they are not classed as leisure or entertainment vehicles. “As a result, under the furlough scheme, there was very little support for our customers – so we needed to work with premium finance providers,” McCarron added.

Transforming trade

Despite these initial difficulties, the broker strove to understand its clients evolving demands and needs to help ensure as many of them as possible would remain in business throughout the pandemic.

“We took the view that if we’re confident and we have got the belief that we can work with our clients so that they can survive, then we can trade out of the other side of it”, said McCarron.

Thanks to this mentality, the broker is now on track to be 30% ahead of its budget – aiming to finish the year with approximately £15m in premiums. Around 70% of its bus and coach capacity has also returned, with McCarron highlighting that only one of its clients “failed to survive”.

But how did McCarron Coates turn a crisis and economic downturn on its head?

Part of the transformation involved finding ways to “work smarter” and “do things differently”, while safeguarding clients’ businesses – “the whole experience made us open our eyes”, said McCarron.

Although “maintenance was key”, new business also became “a bit of an obsession”, he added.

He continued: “We saw there was a big opportunity with final mile delivery and doorstep delivery and we saw that people’s buying methods were changing from high street and supermarket to online and next day, so we really focused in on that area to see what we could do.”

‘Wish you could hear’

As part of this focus, the broker provided access to a usage-based fleet insurance product that went live in April 2020. This “quick win” saw the broker pick up a 400-vehicle fleet, which was “fantastic because it gave us a bit of breathing space and confidence”, added McCarron.

The broker also received direct authorisation in March this year after having to postpone the process due to the pandemic - this “enables us to be a lot more creative in our growth”, said McCarron.

He continued: “We were able to bring our claims in house [and] we were able to change direction where we needed to – courier, for example. We now insure 6,000 vehicles.

“One in three Amazon parcels that get delivered will be insured by us – we are now using that expertise to create a joint venture and a spin off to create a new insurance environment for the gig economy for pay-as-you-go courier insurance.”

Helping clients at a broader level, inspired by the transportation industry’s ‘Honk for Hope UK’ campaign, McCarron Coates launched the ‘Wish You Could Hear’ coach sector initiative in November 2020 to send a clear message to the UK government – 5,000 postcards were sent to customers to encourage contact with their local MPs around pandemic challenges.

The broker also hosted live webinars with its local MP and clients, to help the government understand the pandemic-driven issues “from the operators mouth so to speak”, McCarron explained.

Honk for Hope UK was created by Jenna Rush, managing director of Newcastle upon Tyne operator North East Coach Travel, in 2020 to raise awareness of the coach industry and encourage more support from the UK government amid the pandemic.

Communication during the pandemic was also a challenge, McCarron said, as “clients wanted answers today, especially what their position was on premium payments or claims payments” - but the broker “struggled to get through to the people who were making these decisions”.

He added: “A lot of our industry struggles to get the basics right, but actually if you’re true to your word then clients do appreciate that.

“In a strange way, there’s more positives than negatives [arising from the pandemic] – we’ve grown substantially throughout.”