Broking success: Richard Dornan, Premium Choice

▶ When was the company set up and why?

Mark [Woods] and I met in 1990 at Express Insurance. We were both directors and worked together for the best part of nine years. He was sales director and I was the underwriting director. I felt that my boss at the time didn’t appreciate what we did so I said to Mark ‘we can do this on our own’. We left there in 1999 to form our own company, Premium Choice, just the two of us. 

▶ How have you grown the business since then?

In 1999 it was a very different time with no internet. It was Yellow Pages advertising and we had a strategy which worked. We were very busy very quickly. We’ve always done niche motor and a lot of young drivers. There was always a big demand for it. We had good relationships with insurers and within less than a year we had 20 staff. It’s been a success story all of the way through and we’ve grown nearly every year since we started.

▶ You do a lot of specialist vehicle classes – does it benefit you to be niche?

Yes, because mainstream motor is becoming very commoditised now. It’s driven by direct writers and the prices are very cheap. We fish in a different pond – young drivers, convicted drivers, modified cars. If something doesn’t fit the standard space, that’s what we do best.

We fish in a different pond – young drivers, convicted drivers, modified cars. If something doesn’t fit the standard space, that’s what we do best

Richard Dornan

▶ Do you insure anything unusual?

We insured the tanks in the film Fury. We insure military vehicles, fire engines and all sorts of weird and wonderful vehicles, including motorbikes, vans, cars, custom cars and classic cars – we do them all. The good thing about classic cars is that the business doesn’t churn. When someone takes a policy out it’s hard to move. We are looking to grow that market this year.

▶ How do you recruit employees who are really into specialist vehicles?

They’re hard to find. Trying to get them from another broker is hard enough. It’s not something you can normally advertise for. You’ve got to know somebody who is into cars and they might not know insurance but they can adapt. It helps if they understand cars, because customers that own these sorts of vehicles expect them to. It frustrates clients a lot if you don’t know what you’re talking about. 

▶ Is the discount rate change going to impact you?

It won’t impact us directly, because we don’t pay claims. But it will impact the providers that we use, especially as we insure a lot of drivers under 25. The reinsurance premiums that these insurers pay will be adversely affected. It’s not good news for the market at all.

From a broking point of view rates are going to go up quickly and more so for young drivers. That itself will present additional issues with capacity.

▶ Have you thought about branching out to any other areas of business?

We’ve just launched a new leisure and lifestyle division. We’ve bulked up our management team and taken two senior guys from a big corporate firm that have first-hand experience in doing this sort of business. It kicked off in April and we have high hopes. They’ve got the binders in place and all the retail customers to go with it so we’re very excited about what they can achieve. It will be good to have another line of business coming into the brokerage.

▶ Are you looking to make any acquisitions?

Not at this moment in time. The market needs to stabilise first. We would like to grow as a business and diversify and we’d like to see how the leisure and lifestyle launch pans out. But I certainly wouldn’t rule that out in the future, it’s a good way to grow if any opportunity arises. We’ve had organic growth for 17 years and for now there are no changes.

Standard motor will be transformed within the next five years. The youngsters don’t want to call anymore, they want to transact electronically

Richard Dornan

▶ How do you tackle fraud?

You have to buy the tools that are out there, plug the software into your database and do all of the checks needed. We still have a significant amount of people that do manual checks as well so there’s a lot of resource required to make it work. We believe it’s worth it and the insurers do too and we get value from it. We have a lot more automated at point of close [checks] than we did a few years ago.

▶ How do you use technology to stay ahead of the competition?

We employ data analysts. It helps us price accurately and attract the right quality of business and gives us opportunities of data sharing with insurers to combat fraud. I believe if an insurance broker like us didn’t have a differentiator, we wouldn’t be around. It’s about being viable and providing additional value to the insurers that you use.

▶ Do you worry about disruptors coming into the market from outside of the sector?

Very much. Standard motor will be transformed within the next five years. The youngsters don’t want to call anymore, they want to transact electronically. The less contact the better. But you can’t make everything black and white. As long as we’re always there to hear the story and look at the grey areas that’s our value. Additional question sets using technology will be critical.

▶ What is going to be your main focus this year?

To grow the company in the short to medium term. We want to increase our presence in the non-standard market, continue to look for diversification in the brokerage to add extra value and to cross-sell to our existing client-base.