Anything is possible: Q&A with Henry Engelhardt

Admiral Group has defied a tough economy to post market-beating results, and has enjoyed a stellar rise in share price so far this year.

Its chief executive, American entrepreneur Henry Engelhardt, has taken the company from an obscure Lloyd’s-backed start-up to a FTSE 100 giant that includes aggregator Confused.com and brands Elephant.co.uk and Diamond.

So where next for this Wales-based success story? We talked exclusively to Engelhardt about where his ambitions lie.

Q. What are your plans for the UK general insurance sector? Are there any more product launches in the pipeline?

A. We have said that we are looking into household insurance. We currently have a small team working on this, and there's the chance of a launch in 2011 – but 2012 is more likely.

Q. Admiral Group has performed very strongly in challenging market conditions, largely avoiding the trend of escalating bodily injury claims that have affected some rivals. How long can Admiral Group maintain that level of performance?

A. We have one of the best combined ratios in the insurance business, and this enables us to continue to price competitively. We'll aim to keep our level of performance as long as we can!

Q. Year on year, Admiral Group's turnover and profits continue to climb. Can you reveal some of the secrets to the company’s success?

A. If I told you, they wouldn't be secrets! Seriously, there's no magic formula or secret potion. We do a lot of things well. We have good ideas, which is half the battle, but we also implement the ideas well, which is the other half of the battle.

I think a lot of our success is down to the great customer service our people give every day. When you bring customers in, price is very important. But it's service that turns people from shoppers into loyal customers.

Q. Admiral Group’s market share has grown rapidly to become the second-largest private car insurer in the UK market, only now behind Royal Bank of Scotland Insurance. Is it your ambition to be number one in the UK and, if so, how far off is that day?

A. We have around 10% of the UK private car insurance model by value. But we don't target market share: market share is a by-product of growth. If we can continue to grow profitably then we will, and we will therefore continue to gobble up market share. This might take us to 11% share or 25% share. Whatever it is, so be it.

Q. The European Court of Justice is likely to rule against gender discrimination in insurance. What are your plans to adjust Admiral Group, and especially the female-focused subsidiary Diamond, to this new environment?

A. Obviously we will comply with the law, but it's silly to speculate on what it will be before it gets announced.

Q. Brokers in personal lines motor are suffering, with limited capacity in young drivers, an area where Admiral Group has prominence. Would you ever consider entering the broker market for private motor?

A. At this point in time, we are not considering entering the broker market.

Q. There has been speculation in the City of a foreign insurer bidding for Admiral Group to gain a foothold in the UK market. Would you ever consider selling the Engelhardt shareholding and exiting from the group to pastures new, such as Peter Wood did with Direct Line to then build up Esure?

A. We're a publicly traded company, and if a serious offer was made to buy the company, the board would have to consider this for the benefit of all the shareholders. At this time no offers – serious or otherwise – have been made for the company.

Q. Admiral chairman Alastair Lyons has joined the Towergate board and is touted to become its chairman one day. What qualities can he offer?

A. Alastair is a great chairman. He reads well, he listens well and he's always available to help. He has a lot of experience in financial services and with private and public companies. Not surprisingly, we think Towergate has made a great choice!

Q. What is your proudest achievement?

A. Running a successful company while having breakfast and dinner most mornings and evenings with my family.

Q. What is the lowest point in your career?

A. After graduation from university plus a gap year, I came back to Chicago ready to take the world by storm and couldn't get a job.

Q. Who in insurance do you most admire?

A. David Stevens, the Admiral chief operating officer. There is no brighter individual in the industry.

Q. And finally, as an American sports enthusiast working in rugby-mad Wales, you are in a unique position to answer this question: what’s the better spectator sport, American football or rugby?

A. Wow, now that's a tough question! They are two hugely different games played with a similar shaped ball. I'd say rugby is better as a live spectator, because it's all action, but American football is better for the TV viewer because you get to see replays after every play, and can see the true detail of the game. How's that for a hedged answer?