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The changing face of insurance

Mar 18, 2014
Basil E. Fry Company Ltd. is one of the UK’s leading insurance brokers for the moving industry. In 2007 it underwent a Management Buy Out, only a few months before the recession hit. Here Steve Jordan talks to Greg Wildman about how the company handled both.

It was back in 2007 that Philip and Greg Wildman completed their MBO of Basil Fry.  It was a life-changing moment: overnight much more than just a job was riding on the business’s success. Anyone taking on such a project assesses the opportunities, threats and risks very carefully before making a decision.  However there was no way that the brothers could have anticipated the bombshell that was to hit them only a few months later: the worst recession in living memory.


“The insurance industry is a very good barometer of the whole market and in particular this niche that we are involved in,” said Greg. “The downturn started to hit us mid way through 2008, but we weren’t too worried at first.” Greg said that he expected turnover to drop by around 10%. But it didn’t turn out that way. “We didn’t think it would get so bad that companies would lay off people and mothball vehicles to the extent that it would affect their insurance policies. The turnovers of our customers plummeted, in some cases by as much as 40%. Suddenly we had the same number of clients, paying a lot less.”  The recession lasted until mid 2012 for the company: four years, during one of the company’s most vulnerable periods.


Greg said that they had to look at what resources they had and decide how to use them best. They had an excellent reputation, a strong client base and loyal, experienced staff. “From there it was a case of being a bit sharper with marketing, concentrating on our recruitment process and looking at how we could streamline our internal processes. Making the decisions was much easier after the MBO. We would have an idea in the morning, and implement it in the afternoon. It made us much more agile.”


In 2009 Basil Fry & Co made a major investment that helped it to capitalise on what became the new normality of the post recession era: SIRIUS, the paperless administration system specially designed for insurance brokers. This took over many of the administrative functions of the business leaving the staff to concentrate on business development and keeping customers happy.  This coincided with a structural change in the way the company operated. “In 2009 we decided that instead of running a management team and giving work out to the most relevant staff members we decided that each account executive, including directors, would have their own dedicated assistant to manage their clients,” explained Greg. “This means that account managers can get much closer to customers and the office back up is better.”  In addition to this, in 2009, Basil Fry expanded its approach to professional examinations and now insists that the broking team study for the ACII exams – the professional accreditation awarded by the Chartered Insurance Institute. “All staff are supported financially through these examinations and there are additional incentives to pass exams and progress through them swiftly."  Staff numbers at Basil Fry have continued to grow and the Company has just recently expanded to forty staff.  “Success in broking has led to a heavier reliance upon our claims functions and so we have had to address this with new staff in all areas of the business."


Productivity was increased with the new computer system and the team tried to get around as many BAR meetings as possible to develop the business. This included writing some business that the company would not have considered previously and looking for new opportunities to ensure the company’s profitability. “We have always been loyal to the removals sector,” said Greg, “But we did start writing more commercial and self storage business.”  This has been a successful diversification which has left Basil Fry with a substantial share of the self storage market.


Another change had a fortunate affect on Basil Fry without the company having to do anything. Royal and Sun Alliance (RSA) , Basil Fry’s main provider, identified that it was getting most of its business from its top 25 brokers, of which Basil Fry was in the top three. As part of a rationalisation process, in 2013, it decided to focus all its attention on these top brokers and handle all the business through what they have called ‘Platinum’ centres. This increased the day-to-day support given to Basil Fry and helped it to enhance its service, especially to self storage customers.


During the recession the market changed. This change involved many fringe underwriters coming into the marketplace and driving premiums down.  “One of our competitors made great use of one particular fringe market but after just a few years they have declared that they are not renewing existing business or writing new business,” said Greg.  “We have always wanted to maintain a sustainable approach and fringe markets do not generally give you great sustainability.”


“There are signs now that people are considering expanding their insurance protection. Directors and Officers cover, Professional Indemnity insurance and even travel and health insurance are all being considered,” said Greg.  “But most companies are continuing to concentrate on recovery having learnt the lessons of the recession."


The customer-facing side of the business is now very different than in was in 2007.  Policies are all handled online with the moving or relocation company producing its own deep–sea certificates with a few key strokes. A similar system for UK military moves, Portcullis, allows the individual to enter details directly, by-passing the moving company in line with the requirements of the Agility contract.


There is also the claims handling service that Basil Fry provides on behalf of customers. This handles claims from customers and has proved to significantly reduce claims, improve claims records and, therefore, reduce premium rates for participating movers.  Greg acknowledges, however, that some companies prefer to negotiate their own claims, especially those in the corporate market.


There are some new threats of course. One comes from companies who sell insurance directly to private individuals. “We have chosen not to do this as it would by-pass the moving companies who give us most of our work,” Greg explained. “I also know that many movers will refuse to move anyone if they haven’t provided the insurance simply because they don’t know the level of cover provided. For that reason I think it’s unlikely to be much of a further threat.”


In one respect Basil Fry’s the same as many other companies: at the risk of releasing a cliché, its staff are its best asset. Its people have been very loyal and some have been with the company for many years. In fact Greg is perhaps a little old-fashioned in that he likes the idea of a ‘job for life’. Strangely, however, he has a policy of not employing people with insurance experience. “People from a customer services background are best for us,” said Greg. “If they have been in the industry before their preconceptions can be unhelpful. We prefer to train people in the way the moving sector operates.” 


The last few years have been interesting for Basil Fry.  There have been many changes both within the organisation and in the market as a whole. “But I think that companies come out stronger from a recession,” said Greg. “I hope our customer service is now better than it’s ever been.”


Photos - Top: Philip (left) and Greg Wildman; Staff at Basil Fry.

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