It’s a funny old world

As a small broker you might think, why does this guy go on about issues that don’t necessarily concern him, and comment on areas that are of concern to players in a substantially bigger league?

My answer is simple small firms are merely microcosms of large ones and susceptible to all the same problems, with occasionally larger unintended consequences simply because small firms can’t hide the errors large ones make on a pro rata scale.

Many contemporaries of mine have only worked in this one industry, whilst I have been fortunate in working in the Stock Market and Investment Banking. Those jobs covered a period of some 23 years and left me with an inbuilt hunger for information and the want to win.

The game was heightened when transparency and declaration of ones interests became prerequisites to such a degree they are now as common in that environment as saying hello.

Insurance on the other hand still operates a class ridden game of size, the bigger you are the stronger your negotiating position, irrespective of value brought to the party.

There is so much duplicity on commissions paid, that dealing net seems the only way forward and why I had to refer to the debate on commissions as laughable.

It is interesting to note that in a rival magazine to this one there is an article headed ‘Is the bubble bursting’ about comparison/aggregator sites which covers the points I raised weeks ago here, and the London Evening Standard, City Editor this week called for the remit of the FSA to be looked at, again something I have urgently called for and raised here.

“There is so much duplicity on commissions paid, that dealing net seems the only way forward and why I had to refer to the debate on commissions as laughable.

Robert Marshall

Does that mean I am some forward thinking guy? No not at all, I just care profoundly for my business and for contemporaries in the same boat, who for what ever reason are seen as lost in a sea of change that will leave us stranded on some isolated island to die quietly.

Well bigger brethren, you are wrong in your conclusions, the small brokers who are left of which there are many thousands are a sturdy and feisty lot who have every intention of seeing any change through.

We have always treated our customers fairly and kept out books firmly in order. We don’t have shareholders breathing down our necks who don’t quite understand what they have bought into and we have the flexibility to adapt and make change far faster than you.

The small broker understands the need to look after their clients and not treat them as a number, and yes we read the papers and journals and see no need to spin a situation that will be forgotten within minutes to save our bacon.

The pressure is not on us as you would like to believe, even the FSA with its clear discriminatory approach will not kill us off!

Far from it, you now have to pay your massive finance costs and find money to accommodate your crazy overgenerous goodwill write downs, justify your lost renewals retention, the loss ratios to your insurers who don’t find it funny, face the backlash now growing from them on the commissions you perceive you are entitled to as large suppliers of GWP and lose staff through cultural differences or redundancies.

Let’s also not forget the needs to placate your new shareholders and primary lenders, over an above the FSA on the exposure of your deteriorating capital positions, how ever you seek to dress them up, and all this before you can sip your first cup of tea!

“I have said it before and I say it again, big is not beautiful, I have been there and got the T shirt.

Robert Marshall

I have said it before and I say it again, big is not beautiful, I have been there and got the T shirt.

Accepting there have been a fair few small contemporaries who have either closed up altogether or sold out, - possibly now thinking they have been sold down the river – small firms, I would suggest, are actually in a substantially stronger position than ever and particularly more so than you our bigger contemporaries.

Whether the infamous credit crunch will force the break up of consolidators so soon after their hectic development is a mute question, over and above whether the sum of the parts is greater than the whole given the full prices paid to date remains to be seen. But there are massive downside pressures facing them now that were never in their initial business plans which the small firms are well clear of.

Being small does not handicap ones ability to deliver on either price, quality of service, or our appreciation of what needs to be done to progress as a firm.

Our backs are not to the wall like yours big brother. We are moving ahead and will continue to do so with great gusto, I am really not sure you can say any more with hand on heart you are to. It’s a funny old world.

Robert Marshall is a director at Trident Insurance.