Man of the people on the borders

While many insurers have found the peaks and many troughs of the motor market over many years tough going, Admiral has gone from strength to strength. The secret of this success is not a secret at all, but just an old-fashioned focus on good customer service and competitive rates.

Admiral chief executive Henry Engelhardt makes it his mantra. "It is just down to good pricing and good customer service." Never has so much been summed up by so little.

Having motivated staff is the key, he says. "It is easy to lose sight of the work people do, especially when you are at the top end staring at spread sheets. So the philosophy is simple, we want people to have fun, because the happier they are in their work, the better job they will do. And of course to make sure they put the customer first."

To emphasise this, Admiral has a list of accolades. Last year, Admiral was named Employer of the Year at the National Business Awards and featured in The Sunday Times 100 Best Companies to Work For list for the sixth year in a row, as well as named in the Financial Times Best Workplaces in the UK and the Top 100 EU lists.

But what makes Admiral a good employer? "It's not just a matter of giving staff money or perks. It's more to do with making work a fun and happy place to be. And if people like what they do, they'll do it better," says Engelhardt. Although many companies say this, few have the same positive performance.

In Admiral's case this has been achieved through a two-way communication process, giving staff a sense of ownership and keeping something of a "small company" attitude and, of course encouraging fun. In Admiral's latest annual staff survey 91% of staff said they were happy at the company.

But Engelhardt is not happy to stand still. Not content with flourishing in the UK, Admiral is looking to export its distribution model into Europe.

The focus is on motor markets in Spain, France, Italy and Germany.

"We are moving into Spain with an office in Seville and looking at other European countries by the end of the year. We have very successful skills in the UK motor market, which are easily transferable to the European market. We have local people and operations, so we don't just fly people in," says Engelhardt. The US market is also a potential market for expansion.

This means the UK headquarters in Cardiff will become Admiral's international headquarters. Engelhardt is proud of staying in South Wales with offices in Cardiff and Swansea, there are total of over 2,000 employees.

So what is emerging now is a complete chapter in the development of Admiral which equates to something of a Welsh success story. "We are extremely proud of being a Welsh company and, as our results show, it is possible to grow a big, successful company organically in Wales." It would have been difficult to imagine where the company would be in 2006 when Admiral launched back in January 1993 with no customers, one brand and 57 members of staff. It was originally owned by a combination of a managing agents at Lloyd's and management.

In 1999 the management teamed up with a venture capital company Barclays Private Equity and bought out the managing agents. Admiral's continued success survived the difficult market of 1999-2000, even though Admiral increased its prices by 25% each year.

Despite this price ramping Englehardt says: "We have always had advantages down to being good on price and claims management, and though our prices went up they were still very competitive." That says a lot about how the motor market was then, and is now.

In September 2004, the group floated on the London Stock Exchange and Admiral Group began life as a public company at £2.75 per share, with a capitalisation of £711m. Today it trades near £7 and is valued at nearly £1.8bn.

Last year was the company's first full year as a publicly quoted company and a successful one. It made a record profit of £122.1m. Total turnover for the year was £638m, and it ended the year with more than 1.1 million customers.

"Having shareholders is not that different from venture capitalists, they all want profit, growth and earnings," says Engelhardt.

In the early days, Admiral targeted higher-premium business, like city-dwellers, younger drivers and motorists with performance cars - people who traditionally found it difficult to get cheaper insurance.

There followed years of growth involving the launch of three more brands: Bell, Diamond and Gladiator. These brands fuelled more growth and were followed by the launches of elephant.co.uk and Confused.com

These subsidiaries: Diamond, and Elephant.co.uk go for different segments of the direct market; confused.com is the biggest aggregation policy site; and Gladiator acts an intermediary.

But Engelhardt is looking to keep within motor and not make the mistakes associated with some who have expanded into other financial areas.

"We are not looking at other things at all, we do what we do and we do that well. We are definitely not looking to be a general financial services company."

On the present state of the market, Engelhardt says: "The market is tough, but not as cyclical as it once was. We haven't seen any improvement for about four years, but we have been able to sustain an expense ratio above the market average."

He thinks the turn in the market will come in October 2006 or next year by March 2007. "The market is not sustainable over time, companies may be obliged to raise prices," he says.

And he has a great deal of pride in his achievements. "Looking back on what we have achieved, we have bettered our plans."

So what about Engelhardt's future ambitions given the dramatic journey so far? "In 15 years we would like to look back and see us in six countries with us growing everyone, not just in the UK," he says.

On past form, there is a strong likeliness this will happen.