Crisis, what crisis?

There are certain perks to working in the high net worth business – like having bizarre conversations with royalty. At one high-flying function, David Sweeney, director of commercial and personal lines for high net worth specialist Sterling Insurance, met the Duke of Edinburgh. And the subject matter was not for the Queen’s ears. “We had a very esoteric conversation about rugby in Argentina and [fashion designer] Jeff Banks’s underpants, as I was

with the guy who runs Matalan, which sells the branded underpants.”

His work brings him into daily contact with wealth but Sweeney – a “northern grammar school boy” – wasn’t born with a silver spoon in his mouth. The key to selling high net worth insurance, he believes, is understanding the needs and desires of affluent clients. This also means understanding the language.

“The joke is, you ring a call centre and say you’ve got a Bang & Olufsen stereo system worth £25,000. They think it’s a Swedish pop group or something, because they don’t understand the language,” he says.

“If you ring a standard insurer and say, ‘I just bought a £75,000 ring for my wife,’ they’d say, ‘Oh my Lord’. But it’s an everyday occurrence for high net worth specialists. They’re not shocked by it; they know how to underwrite it and the sort of questions they need to ask.”

The 49-year-old chartered insurer joined Sterling from Hiscox, where he was a director, in June 2007. Drawing on his past experience – which included helping to raise Hiscox’s premium income outside London from £2m to £100m within five years – he has formulated another five-year plan, to double Sterling’s profit and revenue.

“We want to make £10m profit from £100m of premium by the end of 2010. So the slogan is, ‘10 from 100 in 10’.”

For 2007, the insurer posted a net overall written premium of £78.2m. In commercial and personal lines, the current gross written premium is £60m. This year, Sweeney says there has been 30% growth in personal lines and 20% in commercial lines, keeping the business on track to hit its 2010 target.

Sweeney is also pushing brokers to engage in more cross-selling. In early October, Sterling closed its commercial underwriting centre in Romford and moved it to the company’s office in West Malling, Kent, where the commercial team now shares a floor with the high net worth team.

On the commercial side, Sterling offers commercial combined insurance, which is a package for the basic needs of small and medium-sized enterprises with fewer than 250 staff. It does not offer covers such as fleet or directors’ and officers’, or standalone high-risk liability such as for contractors. The focus is mainly on “bricks and mortar” insurance.

However, Sweeney is keen to get commercial brokers working in high net worth. “We can help [brokers] set up their own high net worth business. It’s something we’ve done with commercial brokers who don’t deal with personal lines but would like to get involved in high net worth. So we help them recruit, train and potentially fund a member of their team.”

The credit crunch doesn’t seem to worry Sweeney; he even sees an upside. “I think commercial will continue to see good growth. The rates will hopefully increase a bit on the back of the credit crunch if we’re lucky. From a high net worth point of view, people have still got the same amount of stuff as before, it doesn’t just disappear. It still needs insurance and we’re there to provide it.”

He admits the motor market has been hit hard as customers cut back on “boys’ toys”. But he says the affluent still need insurance for their existing houses, jewellery and art, and argues that the credit crunch provides another incentive to protect a home.

“I’m actually having to turn business away, the opportunities are so many,” he says. “Something like 20% of income comes from the City, so there’s still 80% out there. It’s not as though there’s no money, people have still got cash.”

“I am actually having to turn business away, the opportunities are so many.

David Sweeney, Sterling

The structure of the company makes it more resilient in an economic downturn, according to Sweeney. He says Sterling has more limited offerings and is dedicated to a small panel of brokers. This has enabled it to boast a retention rate of more than 90%.

Decisions on how the company is run are easy because non-executive chairman Nicholas Cooper, who set up Sterling in 1994, owns almost 100% of it. Sweeney says Cooper takes a relatively hands-off approach, delegating operational control to managing director John Blundell.

“It’s quite nice to be owned by a person rather than a group of shares that people can just go and buy and sell,” he says. “It has to be a decision that Nick would make to sell the business, so you’re not controlled by the vagaries of the stock market – your shares aren’t going up and down. We couldn’t be split up and part-sold, as might happen to some of our competitors.”

Sweeney describes Cooper’s investment strategy as “very conservative”, which has suited the company well during the credit crunch.

In May this year, Sterling rejected an approach from consolidator Towergate. Sweeney says: “You can never say never about anything. But we are not for sale, we are very successful.”

Looking ahead, he wants to focus on fewer brokers. Sterling has a panel of about 800 brokers but Sweeney wants to pare that down to 300, although he plans to continue dealing with other brokers through IT platforms. The company also wants to start offering its mid net worth products (under £1,000 premium) via trading platforms by the first quarter of 2009, through companies such as Open GI and SSP.

With only a handful of specialist high net worth players in the UK, competition is tight. But Sweeney says Sterling’s mid net worth book is growing because others are pulling back from that market.

It is the latest move in a diverse career. After graduating with a biology degree from Nottingham University, he joined Royal Insurance as a graduate in 1980. He went on to work in a variety of development and underwriting roles before becoming a branch manager and then head of the broker business for the Midlands.

He moved to Liverpool to head Royal Insurance’s direct business (now More Than, the direct arm of RSA), before leaving in 1997 to spend a year in Italy – where he gained three stone, he laughs – setting up another direct writer for Royal.

“I don’t speak Italian, so I recruited all English-speaking management. It’s a challenge to work through other people when you’re trying to set something up, but it was great fun,” he says.

He joined Independent Insurance where he became regional manager for the North West. He left two years before its collapse, joining Hiscox in 1999 to lead the regional broker business. He spent eight years there before moving to Sterling.

Away from the office, Sweeney likes to keep his life simple. Each morning, he drives from his home in Chelmsford, Essex, 50 miles to Morley in Kent to reach the gym at 6.45am. He’s in the office by 8:30am and is disciplined about leaving by 6pm sharp.

He doesn’t take work home, where he lives with Jane, his wife of 25 years, and their three children.

He applies a calm but passionate approach to his work: “I’ve loved my whole career. I’ve been blessed because I’ve not moved companies a lot but I was very lucky having got a lot of experience in various roles.”