Bike boom: Carole Nash CEO David Newman explains why bikers make brilliant customers, addresses Ogden rate problems and reveals what plans the broker has for Brexit
▶ What are the origins of Carole Nash?
We’ve been going for 31 years and were founded by Carole Nash, famously, in her dining room with £500 worth of redundancy money. She’d worked for a general company and run the vintage motorcycle scheme for them. At the time motorcycle wasn’t a line of business that bigger insurers were keen on. It was seen as accommodation business, low premium, dangerous… no one was specialising. Carole recognised that these customers were great risks because they loved their bikes so much and generally spent more time polishing and tinkering with them than riding them.
▶ How has the business developed over the years?
Carole built out from that core market into more modern and mainstream motorcycles. She used specialist schemes and internal knowledge. She retired about 10 years ago and Groupama bought the company. I was also brought in then as CEO.
▶ Are there particular difficulties with sourcing bike insurance capacity now?
It’s actually not hard. Unfortunately when there are accidents it is usually a car that has knocked the biker off. The classic thing bikers hear then is ‘sorry mate, I didn’t see you.’ Bikes are an interesting line in that you do have a frequency of low value claims but the bigger claims tend to sit with the car driver. Every now and then you get a pillion claim for personal injury.
▶ What’s the value of having offices in Ireland and Altrincham?
We went into Ireland about 15 years ago because Irish motorcyclists were asking us to. In talking to Irish motorcyclists we learned they wanted to deal with Irish nationals and have a retail presence – they wanted to know they could come and see us if necessary but it is a much smaller market.
Carole recognised that these customers were great risks because they loved their bikes so much and generally spent more time polishing and tinkering with them than riding them
▶ You are still owned by Groupama. How do you find that ownership structure?
Groupama is the major shareholder with just over 90% and myself and other directors also own some of the business. They have held us for 10 years and been very supportive. They are a mutual so take a long-term view. They don’t supply us with capacity, services or central functions. It’s more like an investor.
When Ageas bought Groupama we ended up working with the same team after the transfer so we have continuity.
▶ Are you planning an MBO now, in the next 12 months or perhaps within three years?
Groupama’s view is that Carole Nash is a long-term hold and nothing has changed. At some point Groupama might look at doing something but there are no immediate plans.
▶ You recently bought a motor book from Ageas, why? How has it been integrated into the business?
Last year we bought Express Insurance’s motorcycle book. Ageas decided to sell three motorcycle brands and the largest was Express. It’s very difficult to gain market share and remarkable that the number of motorbikes in the UK has stuck at three million. We do all we can to grow organically but sometimes we need to look at buying. I am always interested in talking to anyone who has a motorcycle book.
▶ How do you think Brexit will impact?
At the moment we passport into the Republic of Ireland on our FCA licence. We’re committed to remaining there and want to give our customers and staff assurance. What we’d need to do if passporting goes is be directly regulated by the Irish regulator and probably set up an Irish entity. The only certainty is uncertainty, we just need to watch what happens over the next couple of years.
▶ Is Carole still involved?
She isn’t really. The greatest kindness she did me when I joined was that she didn’t meddle. She said ‘if you ever want to ask questions you can, but I am not going to interfere’. She lives close to the office and two or three times a year we have lunch. She reminisces and gives me advice and I share the successes and challenges. For key events she comes along as our founder and guest of honour and sometimes, such as for the 30 year anniversary, we do joint interviews for the press.
▶ Who are your main competitors?
It’s a very competitive sector. We have the largest market share, then we have Bennetts, then MCE, Devitts, MDC and eBike and people like Swinton.
My concern is the Ogden rate change, in addition to IPT rises, and the price increases that will come with that create a communication challenge with customers
▶ Which insurers do you use?
We have great insurer relationships and have been with most of them over 30 years. We go for the blue chip insurers, Aviva, Ageas, Axa, LV and ERS and Markerstudy for more specialist stuff.
▶ The FCA has become strict on renewal wordings for personal lines – how has it impacted you?
It’s been a very big project. Generally we have seen it as a positive move forward in being transparent with customers. We do not drive down prices to get business then put them up at renewal, it’s not our model. We have always been comfortable sharing renewal premium against new business.
My concern is the Ogden rate change, in addition to IPT rises, and the price increases that will come with that create a communication challenge with customers. We have to help them understand it is a market rise. We were shocked by the discount rate change. Frankly I think that kind of move is reckless. There is a real risk there could be disorder in the market.
▶ Where would you like Carole Nash to be in five years?
I would love us to still be number one in the UK and Ireland for motorcycle. We will defend our market share vigorously. I hope we would be a top three player in terms of cherished car and I’d like to see the average product buy-in going up too.