Talking heads: Joe Henderson

Joe Henderson on …

Rates

I don’t see any hardening in the market. There’s the odd little sign, but I think it’s probably 18 months off, although certain risks are becoming more difficult to place.

E-trading

I really don’t subscribe to internet commercial trading because I’m convinced that half the time the covers won’t be appropriate. We’re not going to go into that side. We will keep it service-based, client-based. We don’t want it really. I just think it’s fraught with danger.

Commissions

We’re not getting the levels of remuneration that the consolidators are getting, so if you think about it they should be doing a lot better than us because they are getting significantly higher rates. It’s not the difference between 20% and 30%. They are getting 50% more, and it doesn’t seem to filter through to their accounts.

We’ve always said we don’t expect out remuneration to be any less than someone comparable. If somebody spends four times as much with an insurer, we understand. But if someone spends half as much and gets more than us, we get a bit disappointed. We’re quite happy to take a market norm rate.

Business

It’s got to be profitable, but we have a certain profile of client. They are quite hard clients, but are very fair and do pay for quality service. We do work hard at clients. We’re very committed to claims work. We do walk away from one in five prospects because they don’t fit the profile for us. Having the right client is very important.

Consolidators

I think they are all in a desperate state. I think the whole model has collapsed. They are all in a dire straights - not just financially.

You can’t buy an ethos. We’ve got goodwill of £4m. Debt is very modest at £2m. It’s been about cash flow and reinvesting. We have made good profits, but we’ve been spending it on people really and it’s worked well.

I always relate it to people being in hospital – all the consolidators are in intensive care, one or two have had transplants, and we’ve been to the doctors and been prescribed some medicine, which we’ve taken. I’m not having a go at them per se, it’s just that they set themselves up as something special.

Insurers

I’ve always been a great supporter of Lloyd’s construction underwriters. They understand the risks, they are not scared of them and they will give you the cover, which is very important. They are very honourable people.

I think Amanda Blanc will do a super job at AXA. I think it needs it. If you had to take an insurance company and look at their nationality, it always reflects that insurer. Allianz are very German, AXA very French, all the Americans are very American, QBE have real Australian flair about them. It’s quite interesting if you analyse them. But there’s too much capacity out there at the moment. That’s just keeping prices down for both insurers and brokers, so something has got to happen.

Staff

I still do 75% of the interviews, and my job is to sell the ethos of the company and then decide if they’re appropriate and they meet our standards.

But first of all we always look internally. In excess of 50% of our hires have been home-grown talent. We’re quite anxious to honour contractual situations. It’s been done to us a few times and we don’t like it. It’s far better to walk away from it.

The majority of people I interview work for the consolidators. They all seem to be lacking in leadership and direction. But we’ve not been taking many of them on because I don’t think a lot of them are as good as what we want. We’re still interested in acquiring teams in individual sectors, rather than individuals.

FSCS levies

It’s scandalous. We’re paying for other people’s errors. There may come a time where we have to charge clients for it.

Click here to read the full interview with Joe Henderson.