After a tortuous MBO, UKGI's Shaun Godfrey can now prove that his broker support operation adds value to a broking business with the award of CII accreditation. Andrew Holt reports
Effective and efficient service backed up by the best advice is the name of the game in modern broking. With the ongoing challenge of FSA regulation, initiatives such as treating customers fairly and greater competition from direct providers, the more specialisms brokers have in their armoury the better.
This is where UKGI promises brokers added value. As a prominent business and compliance support provider to the general insurance broking market, the group aims to offer its members all the back-up brokers need to confront the current challenging market.
UKGI offers its members a technical help- line, comprehensive procedures and supporting documentation, a bulletin update service, face-to-face consultancy services, as well as its training workshops and regulatory support, documentation and audits.
"There has been a move away from price to advice. And it is here where we offer an all-encompassing service, which are major benefits to our members, " says UKGI sales and marketing director Shaun Godfrey.
But there is no need to take Godfrey's word for it. At the end of last year the CII awarded UKGI continuing professional development accreditation status - becoming the first business and compliance support provider to achieve such an accreditation. The CII assessed UKGI's compliance training workshops over a three-month period before it came to its decision.
And only last week, UKGI announced it was creating a new company - Insurance Risk Solutions (IRS) - offering risk management guidance and claims support to its members.
Through IRS, UKGI members will be able to gain direct access to a range of markets currently not available, or only accessible via wholesalers or underwriting agencies. It will also start to create UKGI member-only schemes, which will operate on an exclusive basis.
Godfrey says this followed extensive research among UKGI member firms. "It is clear that many, while valuing the enhanced commissions and services available from our partner insurers, would welcome additional support from us in key areas as well as direct access to a range of additional markets."
And, as part of this ongoing business impetus, UKGI also recently launched a PI scheme designed to accommodate all members including those who have some exposure to marine, aviation or financial service risks, together with members who operate delegated authority arrangements.
But the story of UKGI's development is in itself an intriguing one. Originally part of a business within Bankhall, the leading players behind the formation of UKGI - Bob Beckett, Shaun Godfrey and Mike Williams- led an MBO to separate the businesses. This came after Bankhall's commitment to general insurance proved to be schizophrenic.
Back in 2003, Bankhall, better known for its work with IFAs, wanted to grow its general insurance business. Williams, a fomer Biba chief executive, was recruited to undertake this big push. "Mike's connections and knowledge were crucial here," says Godfrey, who was Bankhall's commercial development director. "I am a composite man and not known for my market knowledge and connections, something Mike is well-known for."
When Williams was brought on board to build the general insurance business, prospects looked good. Then in 2005, Bankhall's new owners Skandia Life, pulled the plug on this ambition by highlighting that general insurance was not part of its future business plan.
Skandia's reasoning was not difficult to ascertain, because, for the Swedish company, the purchase of Bankhall was hardly a smooth integration into its business. The value of the company was slashed from £85m to £25m in August 2005 after Bankhall reported a £102m net loss in that year's second quarter.
So an MBO plan was set in place. But the whole situation became somewhat complicated and Godfrey left to make a buy-out bid possible. "I left because if you are part of a management team and want to undertake an MBO you cannot do both, so I stood aside." That was in October 2005.
The MBO took a whole lot longer than anticipated, admits Godfrey. Was this for finance-raising reasons? "Finance had nothing to do with it at all," says Godfrey. "When you are trying to buy a business within a business then there are legal niceties that you have to deal with. But it did take longer than expected."
The buy-out was sealed in May 2006 after seven months of legal haggling. Beckett became the majority shareholder in the business, with Williams and Godfrey equal partners. No venture capital was involved and all the money put into the deal was from the three partners, although Godfrey will not reveal what the numbers involved were.
Bankhall had 350 client firms - ranging in size and business - and these were taken on when UKGI took over the business. "We are the biggest support service provider in the market," says Godfrey.
Once completed, the new business had to make sure the members were happy, as without them there would be no business. "With the takeover we had to ensure that the members were happy and wanted to stay with us, as well as looking at possible ways we could improve. The feedback we got was very positive."
And Godfrey says this proactive approach is what UKGI is all about. "We are not going to stand still," he says. "We need to push further the advice message and keep offering a better service." IT