Steeped in history

Historian Simon Schama would have a field day sifting through the archives of Britain’s independent family-run brokers. Behind the unassuming shop fronts, there’s a treasure trove of social history and piles of documentary gold just waiting to be discovered.

Russell Scanlan, which was established in 1881, is a stellar example of this. Among its records, you’ll find a policy insuring Boots the Chemist against damage by zeppelins – rigid airships, similar to blimps, which were popular from the early 1900s until the Hindenburg ignited in 1937.

There’s also a large collection of “firemarks”: the metal or ceramic emblems that buildings used to display to show which private fire-fighting companies were contracted to them, as well as accounts from a long-dissolved insurer of coal and iron mines – dated before this type of business was nationalised in 1947.

Chairman Bill Russell, 72, joined his father’s firm in the early 1960s and has been working there ever since, helping to build it from an office with a handful of people into a staff of 35. Henry Russell died in the early 1980s, and his son inherited the firm. He prides himself both on the company’s rich history, and its ability to modernise.

The firm now specialises in commercial SME and high net worth private clients, and had an annual turnover of about £1.8m for the year ended 31 July 2008. With 2,500 clients, it posted £12m in premiums brokered.

“The business has evolved but has also remained the same traditional and old-fashioned firm,” Russell says. “It’s based on servicing local companies, organisations and private clients, typically within an hour’s drive of Nottingham.”

“What has changed is a huge expansion in the number of clients we look after,” he adds. “At one time, you could have easily known all their names. But I can point to a number of clients I inherited from my father, and we’re still doing business with some of the same people, over 50 years later. That’s the most outstanding thing for me.”

The early days

The business was originally founded by an Irishman named Philip Scanlan, who came over to Nottingham from Dublin to marry a local girl – her family’s business is still on the firm’s books today.

When Russell first began working for the company, it was entirely paper-based: handwritten ledgers, renewal cards, policy records – which the brokers filled out themselves for their clients.

“You had separate policies for each type of business: fire peril, business interruption, EL, PL,” he explains. “Any fairly small business could have five or six policies instead of a combined one. There was a lot more paper around: there were card indexes for each one.”

Nowadays, there’s of course far less paper, as well as fewer individual policies. There are also fewer insurers around, owing to consolidation.

“I would bet that, in my time, there would be 20 insurance companies with branches in Nottingham, names that people in the market now would never have heard of: Atlas, Royal Exchange, North British, and Ocean Accident. All of them are just memories now,” Russell says.

Ironically, the market was much less competitive in some ways, with practices that the Competition Commission would take a very stern view of today. Historically, Britain was still powered by heavy industry and manufacturing. Insurers agreed tariffs for industrial risks between them, each quoting the same price.

“There would be a woollen mills tariff for any place that manufactured woollen garments with a basic rate of say, 10 and six pence. If premises had more than one floor, they’d add on another two and six pence, and so on.”

But Russell says brokers still had an important role to play: “It was to make sure the insurance company did it properly, that the client got a fair rate and was getting a good service.”

Weathering the storms

Like many independent family-run businesses, Russell Scanlan has survived a great deal in its long history. But current demands are especially hard for a small broker to weather.

One of the biggest challenges for a modern company is regulation. Russell doesn’t want to seem outdated, but he sounds a little wistful remembering when brokers in the Midlands “knew each other and, by and large, one behaved in a civilised manner”, before sharp practice crept in and the market required a firmer hand.

Another challenge the company faced was relatively recently, during the collapse of major insurers such as Independent in 2000, and the massive Lloyd’s losses in the 1990s.

“That was desperately difficult because we had clients whose policies were suddenly not worth + the paper they were printed on,” Russell explains. “Fortunately, because we’d always been very selective about where we placed business, and looked for the highest possible standard of financial stability, we weren’t as affected as some.”

More than ever, Russell and the company’s directors have had to find ways to bring the business into the 21st century but without losing the traditions of professionalism and good service that have made it so resilient.

People first

One of the traditions is investing in up-and-coming talent; Russell has watched many young brokers grow up over the years, and is proud of the firm’s contribution to the local economy.

“One of the nice things is that the business has provided employment for a lot of very good people over the years. We’re stable, we encourage staff to stay. We have really good, qualified people, and we look after them. You get a high-quality person working for the organisation and that’s something clients can relate to.”

Bryan Banbury joined the company in 1988 as an account handler, and is now managing director. “It shows you can work hard and come up through the ranks,” he says. “This is what we’re hoping is going to happen in future, for people in the ranks now to take over when we’re old and grey.”

Banbury was around in the 1990s when Russell sold his shares in the company to colleagues Ian Chaplin and Mike Timberlake, and was one of four directors who took over the company through a management buyout in November 2007. Timberlake died in 2000, but Russell and Chaplin continue to play an important role within the firm. (Chaplin is now a consultant in the commercial team.)

These days, securing new business has become a major focus for the broker, and there are now three staff members who focus solely on chasing new leads. Russell also heads a department that looks to cross-sell policies to existing clients.

Banbury says: “We want to provide a service all the way through. Our idea is either to pick up commercial clients and talk about personal lines, or pick up home insurance clients and talk to them about commercial policies, if they have a company.”

The secret of success

Russell Scanlan also joined the Unitas Alliance in March. Banbury says he wasn’t looking to join a network per se, but he felt an affinity with the 11 other brokers in the network. “They seemed pretty much the same as us: clients value what they do,” he says. “The key for us is the word ‘independent’; that’s really important for the company.”

Independence is something that Russell Scanlan fiercely protects, and the broker consolidation trend is something it is determined to resist. Russell says: “When you’ve been used to making decisions yourself, as we all have for many years, the idea of being told what to do doesn’t appeal. We’ve got the motivation to keep going and we will do.”

All in all, the business seems unstoppable – although at 46 years old, Banbury says the credit crunch is by far the worst environment he’s experienced. The biggest difficulty, he says, is convincing cash-strapped clients of the value of their service, as insurers raise rates at the worst possible time.

“The professionalism we show is going to be really important through that, so clients understand they’re getting value for money even though it’s not cheapest,” he says.

But Russell is more sanguine: chalk it up to a historical perspective. The company has kept trading through recession before, and there’s no reason why it shouldn’t survive this one too.

“It’s obviously very sad if firms that you know and clients you deal with can’t survive; we’ve seen plenty of it,” he says. “But if you’ve still got the basis of your business, and you’ve built up a reputation for being honest and truthful, and doing a good, professional job, you’ll be able to prosper.”