“Twenty (20) years ago we started the business in Altrincham, in quite a dingy little premises on the high street,” he said. “But it served a purpose, it was the foundation for us as we are today and it has been a really interesting journey as the principles that we had back then are still true now. That’s the way we attract clients and the way we want to do business with people. And it extends through to the insurers we’re prepared to transact with – those with a decent reputation and a good financial standing.”
PHP’s exacting standards have served the broker very well, he said, as it has not suffered from the inevitable demise of insurers that occurs over the course of decades in business. As an independent broker, the firm operates on the delineating proposition of ‘fine margins’, a terminology often used by elite sportspeople. Fine margins are about identifying how the attention to detail a broker pays their client can make a huge difference in whether or not a claim gets paid correctly or at all.
“I don’t think clients always appreciate that until you take the time to explain how this industry works,” he said. “[Insurance] shouldn’t be commoditised to its lowest common denominator, which is what’s happening in personal lines and is creeping into the micro-SME space.”
Being able to showcase the value proposition of having a broker on your side comes back to PHP’s focus on selecting the right kind of clients. Shawcross noted a recent example wherein he spoke with a referred prospect who realised that he was overpaying to the tune of some £27,000. It’s not often you get to say that to someone, he said, but what was interesting was that the referred contact had a good interpersonal relationship with his former broker.
While its approach to doing business has never changed for PHP, in recent days the broker has proved that it is willing to undergo a transformation journey when it comes to its aesthetics. The time was right for the rebrand, he said, as it followed on from the firm’s acquisition of Bradshaw Bennett in November 2019 – and offered the opportunity to support all its clients under one cohesive banner.
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“We might have changed it a little bit sooner but the old COVID chestnut got in the way,” he said. “So, we thought we’d put it off to the eve of being 20 years old. Now we’ve got that message that [we’re] one brand, we’ve been here 20 years, these are our values. We want to build on that to attract new targets, new acquisitions and potential prospects. Now we’re in the phase of wanting to kiss some frogs and see who turns into a princess.”
Organic growth and acquisitive growth are equally on the agenda for PHP. The broking business has a “list of suspects” that it will look to convert into a list of prospects over time. Acquisitive growth is a numbers game in that regard, Shawcross said, as it’s about measuring whether or not each of those prospective vendors represents a meeting of minds and whether it’s the right fit for both sides of the equation.
It’s a seller’s market and there’s a lot of capital flowing right now, he said, and PHP is not looking to compete simply on a top-drawer consideration but rather with those businesses who are thinking in a considerate and measured way about the next step they want to take. Of course, the financial consideration is important to sellers who want to see the fruits of their labours, but Shawcross believes the wider market needs to think more carefully about some of the multiples that are being discussed and understand how they translate into short-term value.
“It seems to me it’s just arbitrage,” he said. “You’ve got private equity companies and venture capitalists who are basically playing the arbitrage game, which is fine and we’ll leave them to that. But we’re giving broker principals, teams of people, teams of account executives, and ARs who don’t want to be ARs anymore, the opportunity to fit into a positive culture and do things the right way.
“[We’re offering them the chance] to look after their clients, to look after themselves. If they want to develop, they’re in the right place as we’ve got the [structures] in place to look after them and develop them. Certain broker principals, and account handlers, etc. will want to buy into that and not just look at those multiples.”
Offering a safe pair of hands to prospective vendors is a valuable proposition, he said, and PHP has got the infrastructure and market credence required to onboard an incoming team and its clients in a calculated and steady manner. It’s a safer bet to ensure that retained clients and staff alike are happy in their new home than trying to pass that consideration along to a consolidator who may want to close the office or get rid of the workforce, or move systems going forward.
“That may damage years of goodwill that has been generated with the client base and the internal team,” he said. “I think we give people an option that’s a little bit more considered, and less about the money and more about the value and the long term returns and what’s important to them.”