Ethos Broking Blog

The culture club: how a sustainable ethos can boost business

The Coronavirus crisis has undoubtedly put a strain on the UK economy, brokerages and the insurance industry, as well as our communities. However, at the heart of a broker’s ethos is ensuring that their clients are protected.

This in turn provides revenue for the broker, which then delivers income for the insurers, and as a result the insurers are able to offer more competitive prices, thus saving clients money. All of which feeds into the economy. It’s a wheel which, without one cog, would break. And, the culture of a company can help to keep those spokes spinning smoothly.  

 

Taking a new turn

Since the UK went into lockdown, there has undeniably been strain on brokers’ renewal lines, given the pressures that their clients are under, with many having had to close their doors for several weeks, furlough staff or even make redundancies. So, how do brokers keep the gears turning during a pandemic?

According to Ethos Broking Managing Director, Richard Tuplin, it is focusing on writing new business,

“Independent broking is incredibly resilient, and when you have a really effective, fast responding business, which Ethos Broking is, you can galvanise it very quickly. The only real way to trade out of pressure on your renewal line is to do new business,” he shares. “When everybody is focused and allowed to trade in that way, then you can get very quick results, but you have to want it more than other brokers do. That’s what we’re demonstrating, we actually want it more.”

Having a strong culture where everyone wants to be on the same page can pay off. As a result of our values and focus, Ethos Broking’s new business figures for May are up by half a percent on 2019 and EBITDA is on budget for June. Des O’Connor, Bravo Group CEO, explains,

“We are not writing as much new business as we normally would, but we are writing more than we thought we would be at the beginning of the crisis.

“We took a bit of a pessimistic view on 1st April but actually the reality is better than that – we’re renewing more customers, we’re writing more business. Before COVID-19, we set ourselves a punchy budget, and whilst we may be off budget, we are definitely not going backwards. As a business we’re holding our own and writing the same volumes as we did in April and May 2019.”

 

Spreading the load

With our Ethos Broking Hubs spread across the UK, we collectively handle £250m GWP across the business. The average Hub sits at around at £25m GWP, with our largest, Finch, placed at £50m GWP. Having a geographically widespread business naturally feeds further funds into the UK economy, as well as bringing in revenue into the brokerage’s local markets. The model boosts communities across the country – the Ethos Broking cooperative as a whole, the individual Hubs’ regions, plus the broker’s sector specific communities as many of our Ethos Brokers specialise in particular areas, such as marine for Knighthood and motor at Hugh J Boswell.

Despite these challenging times, many industries and specialised communities are continuing to prosper. “If you look at T&R, who have a huge agricultural base, they are one of the most stable in renewal terms because they are pretty COVID immune. People still need to eat, and they are probably buying more food than they ever have,” says Richard.

On the other hand, Bravo Group Non-Executive Chairman, Ian Clark, comments that the Coronavirus has created a divide for brokerages across the country,

“If you look at the premium volumes that are going through Ethos Broking you will find that they are South and South East of England biased. Those parts of the economy are likely to come out of the COVID crisis quicker than the North and North West.

“There are two reasons why this is the case. Firstly, London has pretty much eradicated COVID-19 now because it took the pain first. The second factor is there is a much bigger focus on cross border financial services coming from the South East, which will be less impacted than core manufacturing and other areas that are based in the North.”

The UK’s economy shrank by 20.4% in April – the biggest monthly fall on record and three times greater than the financial crisis of 2008 and 2009. However, Ian believes that the second half of the year is going to be even tougher, which will have a knock-on effect on companies like Ethos Broking.

He explains, “We have a business that mirrors the UK economy – we’ve got a broad spread of SME clients with no particular concentration in any industry sectors. The economy is going to get worse before it gets better.

“We’ve only had two months of renewal programmes whilst we’re in the middle of this crisis. The real problem comes as we get into quarter three and four where furlough disappears and people can’t put workforces back, so your employee numbers drop. The economy will be running much slower than it would have done in previous years.

“Therefore, the impact comes on not only the number of policies you renew but also the value in the policies. Clients will be buying less insurance because they have a smaller headcount, and their people will be driving fewer miles. We are doing well now, we are doing all the right steps now, but the pain is still to come.”

 

It starts with your core values

How do you plan for the further dip in the second half of the year? “Focus on winning in your local market, use this opportunity to build the relationships going forward,” says Ian. 

“We have a touch point strategy with our clients and we’re showing that it is working. We’ve also provided client care packs, however there will be a lot of brokers that haven’t even spoken to their clients,” adds Richard. “We’re reaching out to clients that we’ve lost on premium and they’re coming back to us to say, ‘you’re getting in touch with me when my other broker hasn’t even spoken to me’. That’s a big part of what we’re delivering.

“Your geography is your community, and if you’re putting into that community those relationships hugely count both ways.”

The Coronavirus has unquestionably changed the way we interact with others, and many businesses have welcomed technology like never before. “There will always be a place for personal relationships,” continues our MD. “Our challenge is to be more efficient in that space and have a better advice led proposition; making sure we’re delivering the value in the chain is important. However, if we can benefit through efficiencies either in digitisation or technology, we’ll absolutely grasp those by the roots. That doesn’t mean to say you can’t have a relationship over embracing technology – that is what communities are about, meaningful relationships.”

What has made our 11 Ethos Broking Hubs so robust and thrive, despite a declining UK economy? For Richard, it is the culture that the business lives and breathes, where the brokerages retain their autonomy, all while benefiting from being part of a bigger Ethos Broking community. “The reason why our brokers have been so resilient is that we have not provided this dictator state, where they’ve got no skin in the game. Even though we own these businesses, they are integral to how each individual brokerage operates, and Ethos Broking, succeeds,” he comments. 

“It’s important to understand the culture that Ethos Broking has built itself into as part of the Bravo Group,” adds Ian. “It began with Broker Network, which is a comfort blanket to the broking community. If you’ve got a problem, you go to your network. If you need capacity, you go to your network. If you want advice on HR, you go to your network. The close culture that is already there within the Group sets the ‘ethos’ for Ethos Broking, which joined the family in 2016.

“When you set a company like Ethos Broking up, you are a business that cares and is there to help, and that goes out to the external world. It’s been proven in Bravo Group because we have not had to furlough more than two handfuls of people across what is now more than 900 employees. Generally, for the people we have had to furlough, it has been the person who opens the post in the morning and sits on the front desk, and there just isn’t a job there to do.

“If you look at any of our competitors, I think you would find that the culture is much more hard-nosed and financially driven than the kind of support culture, which is what we’re doing. It probably knocks a point or two off our financial performance, but it gives you a much more stable business in the kind of environment that we find ourselves in today.”

Richard adds, “You can either say you’re in the community or you can be in the community. We don’t look at jobs, we look at how many mortgages we pay. When you look through that lens and how sustainable a business is then that is the effect you can have. When you see all the actions we’re taking of managing costing and attacking new business that takes pressure off your next step, which would be job reduction.”

 

Putting people first

Another upside of the a “support culture” model is people within our Hubs have chosen to step into other positions within the Ethos Broking business, rather than moving on when the opportunity arose. Finch’s former MD, Vince Gardener, has moved into the role of M&A Director and Hugh J Boswell’s prior MD, Peter Foster, is now our Regional Managing Director for the South.

Richard shares, “As long as the capability is there, we will always look internally for talent first. We would rather look internally because they understand what Ethos Broking is. It retains your talent because people know they have not just been put into a place where there is no advancement, and it makes it an exciting place to work; it becomes performance-led.

“This is an environment where people can learn. When we’re taking on new talent, our people are in an environment where they have got backing and they’re able to fail – they’ve got support around them to pick it up and catch it. As you bring talent on without experience, we’re giving it to them real time.”

It’s also about practising what you preach, and finding the next generation of leaders has never been more important, as the UK and insurance industry navigates life after lockdown. Therefore, to further develop our people’s skills and careers, we’re launching a course designed to unlock leadership potential across the Ethos Broking business.

Ian adds, “The bigger that Ethos Broking gets, the more career opportunities there will be. I always describe it as the marzipan – the good people sit just below the top. The concept of marzipan talent is allowing people to have that freedom of jobs because we’re big enough to give them opportunity elsewhere.”

Whilst our industry is going through a PR crisis with COVID-19, people are often forgetting the role of the insurance market, as Richard concludes, “Ultimately, we’re balance sheet protectors. We enable the economy to take risks because we’re protecting those other risks, making sure that a business can get back into shape once it has had a fire or a flood. We continue to do that, so that our clients can invest and push funds into other areas of their business for growth.”  

 

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