Broking success - Grove & Dean: Racing ahead

Market day in Romford means the square is full of hustle and bustle. Dominating one end is the imposing building in which Grove & Dean has resided since 2008, a far cry from the high-street shop in Upminster Bridge where the company was founded 36 years ago.

The business, started by Damian Collett's father Paul, originally focused on life, pension and mortgage business with motor and small and medium enterprise accounts making up only one-third of its offering. Today, the broker handles predominantly multi-niche personal lines, which alongside offerings in commercial vehicle and traditional SME represent 90% of the £28m business.

In the early 1980s, the company moved to Hornchurch; Damian joined in 1987, when it had around £500,000 in gross written premium. He remembers: "I was doing the filing, running errands and answering phone calls. I got involved with some small clients and migrated to bigger ones on the commercial side."

The growth of Direct Line interested Collett and he began to look for a route into the market to make his own. He admits it was at first a process of trial and error: "My Dad said 'I'll back you but what are you going to do?' We got [an Open GI] computer package and a new phone system, put adverts in car magazines and the phone started ringing."

Boy racer
The first niche was what Collett terms 'tuned vehicles' such as Ford XR3s and Cosworths. In 1994, the company created its Performance Direct brand as it looked to replicate its niche success. Collett explains: "We've slowly added new niches. We are now a multi-niche broker operating in the likes of performance, modified and classic car policies." The broker's offering also includes motorcycle, kit car and campervan insurance.

The company still has a dedicated unit of seven staff offering face-to-face commercial insurance broking to local businesses. His father is involved as the company's managing director, leading the non-insurance side of the business.

Managing the change from five insurance staff in 1990 to 135 today, driven by its call-centre based approach, has been a steep learning curve for Collett. He says: "The thing that did it for us was an administration system that could process information and issue cover quickly to handle volume and phone calls without lots of meetings. In the early days that generated lots of administration but today it is streamlined."

He is keen to point out that the system now in place is a team effort: his brother Matthew is in charge of marketing and the management team is very stable. He says: "Almost without exception, if you look at the management team, everyone has been here for over a decade and had the chance to move up." It is a philosophy he extends to all staff; the broker pays for any course with the Chartered Insurance Institute that anyone wishes to take.

Another challenge at the start was bringing underwriters on board. Collett's father had set up many agencies for standard business but finding ones for something "a little bit different" took some time. He recalls: "To start off with, everyone says no. Then you get a yes and the next underwriter you talk to you say 'well I'm doing it with them'."

While the broker has been on the internet since 2000, it does not offer quote-and-buy. Collett states: "The nature of the business we write means that the interaction with the client is more important. It starts a relationship, allows the client to clarify their policy and adds a layer of protection."

Collett does not rule out offering online quote generation - at present any enquiry or aggregator-generated lead is called within minutes - but is keen to stress it would involve a dynamic approach and be for suitable products only.

Lead generation
Keeping the phone ringing is a constant challenge. The broker has developed a multi-channel approach incorporating magazine advertising, pay-per-click on Google and exposure on social media sites such as Facebook. Collett comments: "Marketing has changed over the last three years. Putting out an advert or being on the internet is not good enough, you have to be involved in social media and popping up everywhere to find the niche markets." The company has just invested in an exhibition stand with a trailer that will tour classic car events and conferences allowing enthusiasts to receive on-site quotes.

The hardening rate environment in motor has proved to be a substantial challenge but Collett is positive about the situation due to the broker's proposition. He explains: "The niche suits us because if you are dealing with areas that are difficult and require specialism, the client's propensity to move away is less. Our retention is still under pressure but large rate increases have generated a significant amount of new business. We've grown 15% on client number and by 25% premium so far this year."

The next target is to boost the firm's home offering to the same levels. He says: "Our attitude for home is the same as car. We've developed a scheme with Sterling for high and mid-net worth. It is about process and working closely with people."

The broker has been building its scheme and IT for over a year. It has already achieved success, with home lines now representing just under 20% of the company's new business clients this year; 18 months ago it accounted for less than 1%. Collett states: "It is not just something you can switch on. This year has been a learning exercise and we are increasingly setting ourselves up for those clients with claims experiences or subsidence because that's where we offer the most value to insurers." As with motor lines, the company has retained the agencies it needs to satisfy standard enquiries.

Next year will be dominated by cross selling, on which Collett says: "Home lines over the next couple of years will be an increasing focus for us, because if we insure your nice car then we can insure your nice home." Another area the broker is looking to build is micro-SME cover: the company has always offered it (and it accounts for £700,000 of business) and Collett predicts that there will be an online SME presence next year.

He sums up: "We don't want to be just a motor broker, we still want to grow in that area but we are looking for balance." This broker is ready to drive into even more successful niches than its successful motor base.