Broker Gale & Phillipson is chasing commercial clients in its quest to reach £50m premium income in five years. Jason Woolfe reports

It has been A long time since the streets of Harrogate rang with the sounds of Percy Gale's pony and trap. It might have been primitive, but for the early 20th century it was a serviceable way of selling insurance.

And selling insurance is what turned out to be Percy's forte.

Harrogate has changed since Percy Gale helped to found Gale Monkhouse in 1904 back in his pony and trap days.

Ever since the farming town blossomed into a Victorian spa centre and discovered tourism, it has concentrated on serving the changing needs of its visitors.

Bill Clinton and Mikhail Gorbachev have dropped by in the past two years and former New York mayor Rudolph Giuliani is due in 2003, all for the locally-held Yorkshire International Business Convention.

With North Yorkshire attracting people of such stature, and the commercial strength of Leeds and Bradford, Harrogate has been turning on its charm for conference and business visitors.

Property has never been cheap and recently has been shooting up in value faster than most other areas.

Which brings together an interesting business mix for old Percy Gale's successors at what is now Gale & Phillipson.

The Harrogate broker is gunning for corporate clients. Currently, its commercial department is worth about a third of the overall business. Premium income from corporate clients generated £4.4m in 2002 and the aim is to grow at 25% per year.

Corporate manager David Raw has a keen eye for a good property risk, but is convinced that the company's continuing prosperity lies in expanding the commercial side.

"My eyes light up most if somebody says they've got a property-owning client," he says. "There are some exceptionally good products on the market and insurers do still bend over backwards to assist. It's a very cost effective way of writing business."

But picking up more corporate clients - particularly those paying premiums of £100,000 or more - enables Gale & Phillipson to offer a range of extra services, such as risk assessment, shareholder protection and financial advice.

This, plus income from acquisitions, is how the company will hit its target of £50m of premium income in five years' time, Raw says.

As the direct writers begin to take more of the small commercial market, brokers such as Gale & Phillipson need to move up market to generate profits.

But it also allows the broker to sell its traditional strength - business based on strong relationships.

"Ten years ago we were dealing with clients that paid less than £10,000 each in premiums. Our current top clients are paying more like £150,000 and we're looking towards £500,000.

"The aim will be that our corporate division will produce the majority of our income within the next few years.

"But even if I have a client who's paying £25,000, I can show him areas where he doesn't have cover - whether it's key name insurance or directors' and officers' cover - and get a competitive premium."

One consequence of taking on more and larger corporate clients is that Gale & Phillipson will need more staff in more offices.

Already clients are as far away as Cornwall and Edinburgh and the company has expanded from fewer than ten staff in two offices a decade ago to more than 30 staff in three offices.

The new branch, in Skipton, came as Gale & Phillipson acquired local broker EW Smith in February 2001 and enlarged the operation.

As well as acquiring brokers, teams could fit into the growth plan.

Raw, in common with other acquisitive brokers, sees opportunities for snapping up businesses as the looming reality of FSA regulation drives many smaller brokers to consider selling up.

But why should a small broker sell to Gale & Phillipson rather than a global giant with far deeper pockets?

Raw's answer is that the company's emphasis on relationships gives it an advantage here, too.

He argues that by combining traditional values and a youthful, forward-looking board - the average age is 41 - the company will appeal to both clients and prospective sellers.

But there are other ways for Gale & Phillipson to pick up new business.

The company's biggest client was signed up as a result of a solicitor's recommendation, and accountants are also a rich source of contacts and potential new clients.

A marketing drive is planned to kick off 2003 with a higher profile.

Percy Gale would have jumped back on his trap to drum up new business, but a new logo and corporate image is the more modern approach being adopted.

There is clearly an element of risk but Raw is confident.

"We're bringing in the staff to cope before we've got the business, so we're being quite ambitious. But the business will come in."