Mike Wall talks to Insurance Age Magazine

At a time when personal lines motor brokers are under threat from the growing presence of direct insurers, Michelle Worvell speaks to Fresh! Insurance Services about the secret of its success and its best-selling private motor product, Ladybird Insurance

The personal lines broker is dead! Long live the com­mercial broker (who does a little personal lines on the side)! Some would say that this is a true snapshot of today’s independent broking market, but to agree with this view would be to overlook personal lines motor brokers who are using innovation – and strong business acumen – to drive strong inroads into the sector.

Once such broker, Fresh! Insurance Services, established in 2002, has grown from little more than a few people working together in a small Worcestershire village to a company now employing dozens of staff and offering its services throughout the UK. The company, which is based in Alvechurch, was set up by Lisa McPherson with the help of Mike Wall. Both were later joined by Ms McPherson’s brother, Mark Powis, who now holds the position of operations director.

Since its set up, Fresh! has established two strong private motor brands with Ladybird Insurance for women and First Insurance for men. The former drives 90% of the busi­ness through Fresh!, and it now has an impressive 21,000 customers. In addition, the business also provides commercial ­van insurance, home insurance and a range of support products and services.

General manager Mr Wall agrees that it is very difficult for new entrants to set up in the private motor market at present, and attributes this to a number of factors. “The main problem facing anyone setting up a business now is trying to obtain customers, as their buying habits are changing,” explains Mr Wall. “Although call centres – like the ones we currently use – are still playing a large part in the level of private motor busi­ness being generated, nowadays customers tend to go to the web first and then to a comparison site to double check the premium they have obtained.”

The secret of success

Mr Wall believes the secret of Fresh!’s success is due to the fact that it is both niche and targeted in its approach. He says other brokers often approach him claiming they have been selling women-only car insurance for years but points out that their mistake was to never promote the fact that they were doing this: “In order to create a successful new private motor broker, they would need a massive marketing budget to promote their products, other­wise they might struggle.”

“The Ladybird brand will appear on television for the first time in February; we made this decision after realising that there are lots of television advertise­ments promoting private motor and we needed to be able to compete. They will be running at peak time between 4pm and 7pm when we hope to catch our target audience at home.”

According to Mr Wall, the other main barrier to entry into the market is obtaining agencies from insurers, as brokers need to prove that they are able to support an insurer and prove that it is going to be a cost-effec­tive proposition for them.

Despite these barriers, Mr Wall feels there will be several new entrants into the private motor sector: “Other brokers, like us, are making a success of the private motor market and new start-ups will happen. It is my belief that there are numerous brokers who have sold their firms but are thinking of coming back to the sector.

“People will give the private motor market another shot but the younger they are, the better chance they have to approach it in a different manner. New brokers will always appear, as people want to challenge the status quo.”

The issue of falling private motor rates has been high profile in the market for several years, and it has made trading in the sector a challenge. “The last thing we want the price to do is fall, and the current vibes indicate that rates will increase,” Mr Wall explains. “The product definitely needs to increase in value and everyone in the market wants that to happen. None of our insurers are happy with what is happening but, hope­fully, as a couple of them have started to increase their rates others will follow.”

In addition, a broker trying to obtain customers has to be able to compete with a proliferation of television advertising, as the traditional ways of attracting business have been usurped by the web. “You are faced with this problem at renewal stage, which makes it difficult when you are not a brand name,” comments Mr Wall. “Direct insurers have gone on the attack – it is particularly hard to compete against the multi-channel operators, such as the Post Office.”

So what is the answer? “We have a panel of insurers, so if a customer has a quotation, we will try to get a better quote from our insurers,” Mr Wall replies. “However, hopefully customers have got to know us so well that they will stick with us – that being said, people are very price sensitive in the motor market. Interestingly, we find that female drivers are able to see beyond the cheapest price and advertising, more so than men.”

A turning tide

Fresh! believes that the tide has turned in favour of the internet, so it is now going back to its original concept of setting up a web-based business as, at present, it does not offer a facility to buy online. The broker currently has 70% enquiry from the web and 30% through its call centre, but is aiming to adapt the business so that customers will be able to buy online shortly.

Mr Wall says: “We want to be able to come in on a Monday morning and see figures on the board from all the queries we have had from the website at the weekend. We get a significant amount of business through aggregator sites, but you have to manage the relationship carefully as these sites will blank you if you don’t return a quote to a customer from the site within a set time.”

It is easy to talk about the negatives of being a private motor broker but Mr Wall says there are positives as well: “It’s a people industry, from the people that we deal with to the people that we employ. We want our staff to enjoy the phone calls that they take – they are not robots and do not stick to a script, so they need to be able to hold a conversation with customers.”

As far as Mr Wall is concerned, the future for Fresh! as a specialist private motor broker is very bright, and he has ambi­tious plans for its future. “The statistics indicate that women are safer drivers, which makes them a good target market. We would like to increase the numbers of customers we have to more than 30,000 by the end of the year, and we want Ladybird to be a more recognised brand for consumers. All in all, we are looking forward to the challenges ahead.”

Article Courtesy of Insurance Age Magazine

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