HSBC Insurance Brokers to overhaul business

HSBC insurance broker chief Philip Gregory is carrying out a strategic review of the business to galvanise its existing client base and revamp back office systems.

The move follows its parent company’s announcement in May that it planned to double the proportion of profits it makes from insurance from 10% to 20% across the globe.

Gregory would not rule out redundancies as the business attempts to eliminate back office inefficiencies while securing an additional 22,500 commercial policies next year.

He said that three central planks of the review, which began in May, were to strengthen connections between commercial broking and sales teams, to cross-sell products, and to reorganise the business through the rationalisation of back office functions.

Gregory said: “We will be working to bring down the number of locations where we are processing administrative functions.

“Because we have been operating around product based, geographical locations, we have multiple back offices. Each London market has its own – that is inefficient.”

The process will begin next month, when the smaller commercial accounts will be moved to its office in Bournemouth.

By the middle of next year, all back office facilities will have been brought together at the same location.

Gregory said that staff were fully aware of the impending changes, and insisted that there would not be huge redundancies. “You will always have natural wastage,” he said.

HSBC has 1,500 employees in the UK. It has six offices in London, Glasgow, Birmingham, Manchester, Bournemouth and Haywards Heath.

As part of the review, London market operations will be consolidated in the company’s Liverpool Street office. 175 of its 350 staff at Canary Wharf will move with the rest remaining to service corporate banking clients in the London and South East markets.

The company plans to drive its growth through its retail commercial business. Gregory said that HSBC’s biggest advantage lay in its existing corporate relationships with clients, which number in the order of 1 million.

Although SMEs represented the best fit for its business model, Gregory said the company would look to grow its business elsewhere.

“It is important that we do not ignore the rest of the market. We are looking higher up the corporate chain.”

The company plans to offer existing policyholders reviews, and potential clients a range of promotional offers. Every time a customer opens an account, they would be offered insurance services. If they accept, they will receive a phone call from Bournemouth.

Electronic document management will also be introduced next year.

There are also plans to grow the company’s existing reinsurance, specie and offshore energy account, and to develop its risk management facilities. And it would be looking at its high net worth account.

Senior appointments will follow over the coming months.

Last year, HSBC increased its brokerage by 8.6% to £134.6.m. It posted pre-tax profits of £10.8m.

In May, HSBC launched a joint venture with Norwich Union to grow its personal lines accounts. It has only a 1% share of car and house insurance policies in the UK, compared with a 15% share of current banking accounts.

Gregory concluded: “We have to not only wake the giant, but get him moving.”