Passionate about the Best Customer Experience

Michael Edwards, Julian Edwards and Big ’Ed of MCE Insurance

Family-run MCE Insurance specialises in personal lines, namely motorcycle insurance, and is focused on growing its business, but its philosophy is not just about becoming the biggest - it's about becoming the best. Sarah Hills chats with the family firm managers

Now is the time to be an independent personal lines broker, apparently. And if you are part of the Edwards family, which runs MCE Insurance, you will definitely be of that opinion. Since 1975, the broker has grown from founder Michael Edwards sitting alone in an office in Northampton to a team of more than 130 people with more than 100,000 customers. Where once Michael would sell any type of insurance cover to whomever happened to come into his office, MCE Insurance has established itself over the past 20 years as a modern independent broker, specialising in personal lines.

Having moved its Northhamptonshire base from Wellingborough to Rushden last April in order to double its staff numbers, MCE Insurance is now developing its existing call centre facility, boosting its direct marketing and building on a strong affinity arm.

This broker has a plan - and an ambitious one at that. Managing Director Michael, working with his two sons Julian and Dominic as well as a recently established Management team, has embarked on a mission to become the UK's number one motorcycle insurance provider. Keeping in mind that Post caught up with Michael and Director Julian at the recent MCN London Motorcycle Show at the Excel Centre - only to find them surrounded by a plethora of powerful bikes and somewhat scantily clad girls at every exhibition stand - you could argue that this market's appeal is self evident.

However, as Julian explains, there is a serious reason behind the move. "We have made a strategic decision to concentrate our efforts on motorcycles because we already have a developed portfolio with significant market share and an excellent reputation among bikers and the wider motorcycle industry. As an independent broker it is critical to deliver on our purpose within a niche." Another contributing factor could be the fact that Julian is a founding member of the Motorcycle Industry Association and Motorcycle Safety Committee, which advises the government on how to reduce the road deaths and serious injuries of bikers.

The move to the new Rushden premises signalled the right time to flesh out this ambition into a firm strategy. Since then, says Julian, MCE has been building a solid infrastructure to support the plan for growth. "The old location was holding us back, but the move has allowed us to attract more talent, appeal to different types of people and build up our management team."

Recent appointments include Matt Duck as HR manager, who joins MCE from Tesco, and five more in the marketing team, a further two joining the IT department, and the Management team being boosted from five to eight people.

BUILDING BUSINESS

Michael adds that MCE's investment has been geared towards making the company more attractive - - not only to its insurer partners but also potential staff. "We made the decision not to go out looking for insurance types," he explains. "Our business is retailing insurance products for our partners, and for that we felt we needed a different approach. The new Management team has brought in a new attitude and a diverse way of doing things. It's a great melting pot."

Having established the Management team, MCE has set about bringing various operations in-house - something that can now be catered for in the new, more spacious offices. Julian points, in particular, to the creation of its own marketing department. "We have brought in media buyers, media developers, aggregator linkers, web developers and designers - a whole new team. Our vision is to develop and deliver products and marketing solutions to market much quicker. In addition, we have created new positions in the IT department that are solely concentrating on pricing and product analysis. We are intelligent about our products and work closely with insurer partners on this."

MCE has already evidenced this - last year, the broker won the exclusive tender to provide insurance for Ebay motorcycles. The firm fought off increased competition from key comparison sites to sign the contract with the website, which apparently boasts a motorcycle deal every four minutes. At the time, Julian spotted an increase in commuter scooters and sales of second-hand motorcycles, and called the tender the most important insurance deal of 2008 after achieving a 25% uplift in internet sales.

With that in mind, he highlights MCE's new website - an evolution of its fully interactive e-commerce site for private car and motorcycle insurance using Open GI's web design and hosting and integration solutions, which launched in May 2007. "The new site is the bedrock of our e-commerce strategy," he explains. "We have to be able to quote, sell and renew online, and have a strong direct offering." Currently under development, the site is being primed for launch next month, with plans to introduce a community section and a forum. The aim is to achieve real-time feedback on customers' experience of MCE. "Good or bad, customers can comment on what they thought of the way MCE handled their insurance experience," says Julian. "If there are any negatives or customer frustrations, we can move to resolve them quickly."

SOLID FOUNDATIONS

As for the direct offering, both father and son stress the importance of this as an independent firm facing the market share being swallowed by aggregators. And Julian also expresses concern with the tactics and ethics of the comparison sites. "We are in a niche marketplace within personal lines and our average premiums are lower. The problem with aggregators is they attract a high level of short-period cancellations, and much lower renewal-retention. Aggregators are an acknowledged force in the marketplace, but they are in danger of freezing out companies because of their costs. They are squeezing the insurance industry at an unreasonable rate."

Although a valid concern, MCE's ambition to be the number one provider of motorcycle insurance does not solely rely on appearing on the aggregators sites. Part of the broker's marketing strategy is to deliver the best customer experience at every opportunity. Julian is keen to emphasise that MCE's aim is not only to be the biggest insurance provider in terms of revenue, but also the best in how it treats its customers in every part of the insurance cycle. "We are proud of our 'Purpose and Principles'; it sets out how we are going to achieve our ambition," he explains.

"After putting our Management team together, we created our principles, our critical messages, which we hope embody the whole culture at MCE. That includes a huge investment in staff on our part. We want to attract, develop and retain talent so that our people's growth matches that of the company. We will do this by continually training and mentoring our staff to encourage career progression."

And putting money where its mouth is, MCE has introduced the Chartered Insurance Institute's training programme - Broker Assess - which all employees undertake. "We are passionate about our infrastructure," says Julian. "We have reached a point where we can manage a significant increase in business - all areas of the company are staffed up, so now is the time for more focus on sales. With that in mind, we can recruit additional sales advisors and are currently looking for eight people. This will be our first intake for 2009, depending on how fast we can grow."

Michael admits that although MCE's strategy is not just about becoming the biggest, the firm will need volume to achieve its ambition. "We are not going to do anything to jeopardise our growth, or for it to be at the expense of our insurer partners - everybody needs to produce returns," he says.

But he will not be drawn on specific growth targets. "We have a great vision of what we want to achieve, but our growth will be organic; we have no war chest or timeline targets, and we are financially viable. We will see where our team takes us - we don't do maverick."

Julian agrees: "We are two years into our five-year business plan and, at the end of the five years, we will see what happens. Meanwhile, we will continue to develop our products, marketing strategy, service offerings and training facilities. We have MCE Insurance and MCE Claims all under one roof, a focused and hungry team, and can make our own decisions. This is the benefit of being an independent intermediary."

Another benefit is the ability to take risks. Towards the end of 2007 and beginning of 2008, MCE reviewed its portfolio of products. This resulted not only in its 'Purpose and Principles' but a decision to cut back on profitable lines of business in order to achieve its overall ambition.

FOCUSED APPROACH

Although a bold move, Julian explains this has enabled MCE to go in the right direction. "We have cut down on our business lines over the last year and now offer four products: motorcycle insurance, car insurance through affinities, taxis and vans. But these could be consolidated further. We have exited home and travel, which were profitable lines of business, and will continue to review our product make-up." Asked why the decision was taken to exit lines producing good returns, he says matter-of-factly: "They were not allowing us to keep up with our vision."

Michael, however, is honest enough to admit this was a move that made him nervous. "I've been broking since 1975 and have tried to insure anything and everything. It does take a while to get used to the idea of shedding profitable lines of business. But we have an interesting legacy; we closed down our commercial lines plus the life and pensions side of our business 15 years ago and have also reduced the number of offices to one. MCE has constantly been recreating itself, and so far it has worked. It's like retail - if fashion shops didn't update their styles, we'd all still be walking around in platform shoes."

NO WAY BUT UP

However, passion and bravado alone do not achieve growth targets, and this is where son number two - Dominic - plays a vital part in the MCE vision. As head of the affinity division, it is his job to develop this stream of business, and his brother Julian says an affinity arm is a critical component of the broker's strategy. "We are continuing to develop a network of motorcycle dealers and work on increasing white-label solutions for manufacturers."

MCE's affinity arm is already well established; last July, MCE won the contract to provide Caterham cars with insurance, following a year of negotiation. This followed the launch of The Camping and Caravanning Club's car insurance earlier in 2008.

While not prepared to say whether the affinity division was previously being ignored, Julian admits that work to develop MCE's direct distribution was taking up most of its time. "We need to move our affinity progression up a scale; Dominic's brief is the same as the rest of MCE's - to be number one in that particular field."

If MCE Insurance does realise its ambition and becomes the UK's number one motorcycle insurer, it will mark a commendable story of growth. From a one-man band to a 100-plus strong team, MCE has already won numerous industry awards recognising its achievements. And both father and son remain adamant that the customer must come first. In fact, in 2006, MCE gave free insurance to its longest serving customer of 30 years - Richard Gibbs, who took out his first car insurance policy in 1975, MCE's first trading year. Asked why he originally purchased insurance from Michael, Mr Gibbs explained: "He was the only person working in his office and I was waiting in reception for a quote. The phone rang and Mr Edwards asked if I would come back tomorrow as his wife was having a baby. I came back the next day because he was honest and easy to deal with."