Chief executive outlines ‘fiercely independent’ wholesale broker’s organic growth trajectory, emphasising that the firm is ‘still very much a relationship business’
From a spare bedroom to gross written premium (GWP) of £33m – for Simon Lancaster, the growth of commercial wholesale broker SJL Insurance (SJL) has been one of hard work and relationships.
SJL was founded in 2001, when Lancaster – the broker’s founder, owner and chief executive – was 23 years old.
“I had worked at a number of brokers, both large and small,” he tells Insurance Times.
“What was quickly apparent was that the smaller brokers were not getting the service or the access to insurers that they needed to grow and I saw this as a real opportunity.
“I started the business in my parents’ spare bedroom. We simply looked to set up a wholesale broker to work with what, at the time, was a potential market of 10,000 independent brokers in the UK.
“I worked with a few insurers and was able to create a few products, which I then looked to market to brokers.
“The response was such that the number of insurers, brokers and products started to grow and the business grew with it.
“We have delivered growth year-on-year since we started and that includes during [the] Covid-19 [pandemic]. It was tough, but we have managed to keep growing.”
This year-on-year organic growth over the last 23 years means that SJL is now handling around £33m of GWP across 100,000 commercial policies that insure industries such as hospitality, manufacturing, shops and offices, to name a few.
The business boasts headquarters in Worcester, alongside offices in both Bristol and London.
“We are [also] a Lloyd’s broker, which allows us to do some interesting international business, such as kidnap and ransom,” Lancaster adds.
Evolution
A key element of this consistent growth journey has been the ability to evolve.
Lancaster explains: “We started as a wholesale broker and [this] is still at the heart of what we do.
“However, 12 years ago, we decided to open a direct operation, which has been very successful. We now have roughly a 50:50 split between direct and wholesale business.
“We have also expanded the products we offer. We started with homeowners’ business and have now become an all commercial broker, covering the whole range of commercial products. We also have a binder, which supports the work we do.”
Not only has SJL’s operations evolved as the business has sought growth opportunities, but its development has also been linked to the changing insurance marketplace, with the broker seeking to keep pace with the industry’s moving goal posts.
Lancaster continues: “When we started, there were around 10,000 brokers [in the UK] and now the figure is nearer 2,000.
“We work with between 400 and 500 brokers, with which we have Terms of Business Agreement (TOBAs), but when you think of the credit crunch in 2008 and the Covid pandemic, we have undergone some exceptional challenges [in terms of both our] business and our industry.”
A TOBA is a contract between an insurance provider and a broker that outlines the parameters of their business relationship.
Risk management support
Another way SJL has sought to move with the times is to embrace risk management, with the company working with its brokers and insurers to review how it can educate clients around the changing risk environment.
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“We recognise the risks that technology and cyber can pose for businesses and we do work with our brokers to educate the market in the need for cyber products,” Lancaster says.
“Clients and brokers are comfortable with shop, stock and physical risks, but they are still looking to understand the less tangible risks [that] have been created as people [increasingly] rely on technology and many move [their] businesses online.
“We understand that insurance cover comes with a cost, so in the current climate, asking clients to spend more can be a difficult conversation.
“It is tough, but as a market, we are getting there and insurers have been very good in supporting brokers and clients around education. We have to move with the times.”
Connecting brokers and underwriters
Lancaster notes that amid fluctuating insurance market conditions, SJL’s broker partners are looking for greater support from insurers.
He says: “There is still a struggle for some brokers when it comes to working with their insurers.
“If it is a vanilla risk and can be placed online, then it is great. However, brokers say they are still having problems talking to an underwriter.
“We continue to provide that link between the broker and underwriter. For challenging risks, there are still issues. In the past, insurance reps would have visited brokers – that is no longer the case.
“We still look to sit down with our brokers face-to-face on a regular basis. This is still very much a relationship business.
“[The Covid-19 pandemic] and technology [advancements] have changed things with the increased use of Zoom and Microsoft Teams, but brokers want to speak to someone when they have a problem or need clarification.”
Full steam ahead
Looking to the future, Lancaster says SJL plans to deliver more of the same.
“I am 46 and many of the senior management team are in their early forties,” he explains.
“We still have a huge amount of energy. We are fiercely independent and are not members of a broker network. We are targeting [year-on-year] growth and we are not looking to do anything different.
“Saying you will grow each year is easy, but it is always a challenge to achieve. We have a great team here and over 20,000 clients.
“Sometimes you have to take a step back, but if you are taking one step back and two steps forward, then you are going to be ok.”
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