After three decades of violence and some stop-starts on the road to self-government, the Northern Irish economy has new confidence. Insurers have returned to the market – and they’re competing hard.

Brian Kelly knows only too well how much damage bombs have done to Northern Ireland. Now director, Ireland, at Crawford & Company, he has worked as a loss adjuster for 36 years.

Thankfully, times have changed. Terrorists have laid down their weapons and the power-sharing government, which was suspended in 2002 for five years, is back at work in Stormont.

“During the last 30 years with the Troubles in the province, an awful lot of our services were being deflected to support the damage done by bombs,” says Kelly. “There’s no doubt that the new political order has created a much better playing field for the whole economy.”

The renewal of the political progress has brought new life into the region and paved the way for insurers to re-enter the marketplace.

“Insurance companies traditionally have not wanted to write business in Northern Ireland while the Troubles were happening,” says Noel Humphries of broker Noel Humphries Insurance. “Now they’re coming in from everywhere. They probably see us as a profitable region with historically higher premiums.”

But this is not the whole picture, warns Humphries. Rates are softening as a direct result of strong competition in the market.

One leading insurer is competing aggressively and has contributed to falling prices, according to Humphries. “It is trying to take the business off the doorstep of high-street brokers. Yet it is expecting us to support it with commercial business and fleet business,” he says.

Crawford enjoys a consolidated presence in the Belfast region with specialities in the property, liability and environmental sectors. “That consolidation and diversification has meant that, in the past 18 months, we have grown significantly the size of our operation,” says Kelly.

He says the company has about 150 clients on its books, including insurers, brokers and self-insured individuals. He adds that the turnover potential for loss adjusting in the entire region would be £10m to £12m, and Crawford enjoys a significant part of that.

Northern Ireland is ideally positioned to tap into both the UK and Irish markets, which has helped to develop Kelly’s business. “Clearly we are part of the UK, but we have a separate jurisdiction,” he says.

“Within Northern Ireland we have two markets – the UK market and the Irish market. There are services that we provide throughout the whole of Ireland. From a strategic point of view it means we are very well placed.”

This has been reflected in the make-up of business between the UK and Ireland. “Ten years ago we would have done 100% Irish business, whereas now it has probably moved to about 75%,” Kelly says.

Humphries, by contrast, has not focused on expanding his broking business into the Republic of Ireland. Based in mid-Ulster, about 25 miles from Belfast, the company’s £1.7m gross written premium is written for business only across the province.

Business is extremely competitive, he says, with brokers driving down prices in an attempt to hold on to what they have. He adds that this is particularly the case with personal lines but is gathering pace in commercial business.

“There’s a lot of it going on in commercial as well,” says Humphries. “Obviously companies want to retain their business and they will cut premiums to repayment levels at least.”

The same goes for insurers, he adds. “It seems incredible that companies lost almost £1bn last year across the insurance market and took it out of their reserves, and yet they won’t put their rates up.”

Sustainability of writing business is also a key concern for insurer Andy Fitzgerald, Brit’s regional manager for Scotland and Northern Ireland. He says the company has had to carefully select the business it takes on.

“We’re not taking on business that is unsustainable,” he says. “We’re writing business but it’s selective. There are a lot of areas that we simply can’t play in because the rating environment is not suitable for us. Most people would concede that the rating environment needs to change.”

Brit established an underwriting presence in Northern Ireland earlier this year, installing fleet, property and combined package underwriters. Fitzgerald says the insurer is on course to double the business written between 2007 and 2008.

“We’ve probably held back some of the growth in the last couple of years because of the rating environment, but there’s still opportunities out there,” he says.

“We are seeing brokers looking to transfer their portfolios because the service proposition being offered by some of our competitors is not what their clients are looking for.”

Fitzgerald believes Northern Ireland experiences greater variation in rates than other parts of the UK.

“There are higher peaks and lower troughs in Northern Ireland. When the market hardens it goes excessively hard and when it softens it goes the other way.”

This is partly a product of the market, he says. “It’s not unusual for clients to seek quotations from four or five brokers come renewal, despite the fact they all probably cover the same insurers. Certainly at the moment this seems to be accepted in Northern Ireland; I think it’s always been that way.”

Despite the waves of consolidation sweeping the market, it seems there is still a place for the smaller, provincial brokers. Smaller players can still operate, and indeed thrive, in today’s market.

Humphries, whose firm employs five people, has existed since 1972, and is an example of a small player using its size to survive in a competitive market.

“From a service point of view, I believe we can offer a much better service to the ordinary man and woman on the street, particularly when it comes to claims and problems,” says Humphries.

“We’ve had people come in here looking for help with things they’ve done online or with direct writers, looking for guidance.”

“Insurance companies are now coming from everywhere. They probably see us as a profitable region.

Noel Humphries

Consolidation is all the rage in Scotland, but some small brokers are standing firm. Mark Blair is one of them.

Mark Blair is what you might call a last man standing. Consolidation has been the buzzword in the insurance market in recent years but it is particularly big in Scotland, which is why it’s so incredible that Blair’s business has survived for almost 40 years.

It’s not that he’s never been asked to sell up – he has had plenty of interest from consolidators. But after teaming up with his father, Jim, in 1989 and buying the company outright in 2003, Blair says continuing to operate as a sole trader on the south side of Glasgow is important to him. He wants to keep the business in the family and has kept his father’s company name, Jim Blair Insurances.

“We’ve had regular approaches,” he says. “But I’m only five years into owning the business and the last thing I want to do at the moment is to sell up.”

His father was previously a mortgage broker and this is reflected in the type of business the company writes. Eighty per cent of the book is building and contents insurance and only 20% comprises motor, fleet and shop insurance.

He considers customer loyalty to be the key to the company’s success and the business has retained some customers since its inception.

“We have a client base stretching back to 1970; a few clients have still got the same policy dating back to the mid-1970s,” says Blair. “They’re happy with us and they’re happy with the level of service from the insurance companies.”

Of course, there are other companies that have managed to stay independent. But the wave of broker consolidation in recent years – thought to be driven by consolidation in the English market – shows no signs of slowing down.

Colin Preston, Smart & Cook’s regional director for Scotland, says: “There are not many brokers starting up in the region. Consolidation in the marketplace has accelerated over the past 12 to 18 months, with Giles continuing to acquire, Towergate coming in and Oval too. The number of independents is probably reducing,” says Preston.

Smart & Cook, which itself acquired businesses for a period of time, was bought by AXA’s broking arm, the newly renamed Bluefin, in April last year.

Also in the Scottish market, Giles bought up Carrick Neill & Co in July and Oval purchased Aberdeen-based Independent Insurance Brokers earlier this year.

Last week, Norwich Union announced that it would realign its UK regional structure, merging the North East and Scotland into one region. Northern Ireland, meanwhile, will come under the North West region.

The insurer said the decision was taken as a result of greater consolidation in the market, which had been particularly heavy in the North East and Scotland. This, it said, had led to larger relationships being managed on a UK basis rather than regionally.

The role of the sole broker in today’s marketplace is therefore akin to a minnow in a very large pond. But Blair’s company is not totally averse to acquisitions. Jim Blair Insurances purchased a small broker, Shafer Financial Services, in 2001.

A converging industry

Given that Scotland has a much smaller population than England and that some parts of the country – the Highlands and Islands – are so remote from the capital, it is no surprise that Scotland has been a hotbed for consolidation.

After consolidation, convergence has followed. Edinburgh is regarded as the centre for life assurance and Glasgow is seen as the hub for general insurance. This has led to a withdrawal from other parts of the country.

“The general insurance centre is Glasgow,” confirms Smart & Cook’s Preston. “Over the last 30 years we’ve seen the insurers who used to be in Aberdeen and Edinburgh withdrawing to Glasgow.”

Allianz has only one office in Scotland, based in Glasgow. Colin Mutch, senior casualty underwriter for Allianz in Scotland, says: “One or two may have smaller offices in other cities, but general insurance is all really channelled through Glasgow.”

Scotland is no longer the manufacturing and heavy industry powerhouse of decades past. Other industries have developed to take their place.

“A lot of heavy engineering like shipbuilding has gone now,” says Mutch. “There has been much more movement towards the leisure industry, entertainment and tourism and, for a spell, electronics, but that has slowed down recently.”

The market as a whole is experiencing difficulty with soft rates at the moment, but Mutch does not believe this is a new phenomenon for the Scottish market.

“I would say traditionally there’s been a softer market here. Generally rates are lower here, particularly in the motor fleet side, but we still have the same competition you’d get down south.”

While motor rates have been depressed for several years, in part a product of the rise in aggregator sites, Mutch attributes this to the lower vehicle density in Scotland than south of the border.

He believes pricing challenges lay ahead particularly with new entrants to the market, which have helped to drive down premiums.

“The challenge is still the soft market with new entrants coming in. We have tried to push rates up and get increases on renewal prices.

“But it’s difficult with some players pricing aggressively for new business.”

Some insurers have closed or merged their Welsh offices, but this country of 3 million people is packed with customers who want a personal, local service. What’s more, the clients in the east don’t always want the same things as those in the west.

“There are not many brokers starting up. Consolidation has accelerated in the past 12 to 18 months.

Colin Preston, Smart & Cook

The Welsh valleys were once the home of mining, an industry that recruited most of the local population. These days, the country hosts a range of businesses – including insurance.

One such business is Antur Insurance Services. Set up in April 2001, the broker has seven offices: six in Swansea and west Wales and one in Pontypridd, which opened in April this year.

Antur has 70 staff and gross written premium of £15m. Antur Group, which includes associated companies, has an overall GWP of £25m.

The recent expansion eastward represents a change in tack for the broker, says operations director Gary Stevens.

It has already snapped up several brokers in the west and Stevens says: “We now need to look east.” While some insurance companies have reduced their office-based presence in the area, Antur is determined to maintain it.

“We’re very much into keeping a local presence to provide a local service,” he adds.

“That’s how we differentiate ourselves from the direct writers and national brokers. We offer a traditional broking service to local people.”

This is in contrast to some insurers that have retreated from Wales. AXA merged its Cardiff and Bristol operations into a single office in Bristol in 2006.

Steve Hancock, area manager, AXA South West & Wales, says the move was necessary, but was not welcomed by all Welsh brokers. “Welsh people like to deal with Welsh people,” he says. There were some initial difficulties but “after a while the dust settles”.

AXA still has a close relationship with brokers on the ground, insists Hancock, with relationship managers working closely with intermediaries and an active management team.

AXA’s Bristol office loosely aligns with the M4 corridor, encompassing Newport, Cardiff and Swansea. North Wales is serviced by its Manchester office.

But Stevens thinks insurers with a regional presence will ultimately profit from being there. “I believe those insurers that stay in Wales will benefit.”

Lyndon Wood, chairman of Welsh broker Moorhouse, says there has been some

to-ing and fro-ing with insurers in the Welsh market, but that they have come back into Wales with a more visible presence in the past five years.

He adds that the broker writes about a quarter of its business locally, with the rest being sourced through insurers’ head offices.

Are insurers retreating from regions in response to the surge in consolidators and the resulting dwindling pool of independent brokers?

According to Stevens: “A lot of insurers have moved out of Wales and pulled back to large regional centres, which I assume is a cost saving.

“But it misses the point that Wales is a market in its own right. People prefer to deal with local Welsh brokers, and I think insurers have pulled out because many consolidators have centralised where they place their business.”

Consolidation is likely to continue, adds Wood. “Protectagroup was purchased back in April by Cullum Capital Ventures. Giles has also been very proactive with acquisitions in Wales, albeit smaller than CCV’s [purchases]. Jelf’s strategy is to go for much larger players.”

Wood, who set up Moorhouse in 1990, has grown the business organically with just one acquisition in that time. Yet Wood doesn’t necessarily regard consolidation as bad for the market.

“If you’re a customer it’s probably not a good thing because you’d want to have lots of independent Welsh firms,” he says. “But from a broker’s perspective it’s probably good as it has made the industry more professional.

“You’d like to think the larger players have more structure and are more organised. They’re probably more compliant, so it’s better for customers from that angle.”

Wales, while not commanding a vast area, does have quite a diverse market, claims Antur’s Stevens, with nuances between the east and west.

“In west Wales, the clients want personal, local service, so it’s very much about relationships. I find the further east you

go, decisions tend to be based more on price – it’s the primary reason why people move.”

But there is competition in west Wales. “We are competing against out-of-area brokers and direct in-house underwriters such as banks and building societies,” he adds.

“In east Wales, maybe with the larger businesses, you find clients go out to tender and have three or four brokers looking at their business; in west Wales that’s not the case.”

Illustrating the shift in the Welsh economy, Stevens highlights the potential for certain lines of business.

“The market has definitely moved away from heavy industry,” he says. “We’ve set up a scheme for the leisure industry. There is still some heavy industry around Llanelli and Port Talbot, but west Wales is becoming more based on leisure and SMEs. That’s one of the growth areas.”

Vital statistics


Wales has a population of about 3 million people. Traditionally dependent on heavy industry and mining, the Welsh economy has changed in recent years with retail and wholesale making up 16% of the total, according to the Welsh Assembly. The Office for National Statistics showed that employment stood at 71.5% in mid-2006.


Scotland has a population of 5 million people. It is made up of 32 unitary authorities across three regions, the Highlands, the Lowlands and the Islands. There are six main cities: Aberdeen, Dundee, Glasgow, Inverness, Stirling and the capital Edinburgh. Employment remained static for the last quarter at 76.4%, just above the UK average of 74.8%. According to the Scottish government, tourism now accounts for 4bn poundsa year. The presence of oil in the North Sea has played a strong part in the economy, contributing to Scotlands exports.

Northern Ireland

With a population of just over 1.75 million people, Northern Ireland has the smallest population of any country in the UK. Manufacturing has taken a back seat in recent years, with a drop in textile production. Despite the Troubles, tourism has performed well. Northern Irelands capital, Belfast, is on the east coast with the North Channel separating the province from Scotland. The region covers 14,000 square kilometres and is comprised of six counties: Antrim, Armagh, Down, Fermanagh, Londonderry and Tyrone. The Good Friday Agreement in April 1998 led to the formation of a power-sharing executive in the province.