Brightside Group’s new CEO Brendan McCafferty has hailed a significant jump in EBITDA for the year 2016-17 as further evidence that the broker’s transformation is on track.
His comments come after the Bristol-based group reported a 22% increase in EBITDA to £5.0m (2016: £3.9m). Overall group revenue fell from £48m to £42m.
Broking continues upward trend
Revenue from Brightside Insurance Services Ltd (BISL), the insurance broking division, was generally steady at £26.8m (2016: £27.1m), but Mr McCafferty highlighted an increase in GWP to just under £100m (2016: £92m), and a doubling in retention rates for private car. Total policy sales also continued to grow, from just under 165.9K to just over 170.5K during the year.
Brightside’s market-leading expertise in lead transfer (wastage), including a new capacity arrangement, has helped increase lead conversion in the Southampton-based unit from 32% to 35% during 2017, as well as an uptick in retention to 66%.
Turning to niche motor, based in Torquay, Mr McCafferty said the taxi and minibus books both doubled GWP thanks to continued investment in digital, which achieved a significant and positive impact on the customer journey.
He said: “Overall these are encouraging results that reflect continued investment in our digital proposition and a relentless focus on improving the way we deal with our customers.” Mr McCafferty cited the launch of Brightside Bike in May this year, which joined Brightside Van and Car on the CDL Strata platform, to give fully enriched MI at the point of call, via ID, fraud and claims history checks, and credit scoring.
“Our comprehensive online self-service portal now allows customers to access policy documents, make mid-term adjustments and accept renewals at any time, as well as getting quotes for other business lines, and this is reflected in our Trustpilot scores for Bristol, which reached 8.3 last year.”
Mr McCafferty explained that operational improvements had been instrumental in successfully rebuilding Brightside’s panel and underlines the “confidence our insurer partners have in our future prospects.”
The Group has also brought in improvements to the back office, including robotics, for back office activities such as documentation, printing and despatch.”
“Robotics has reduced both cost and error rates and we have significantly improved our response time. Using robotics for non-value added activities will also make Brightside more scalable as an organisation.”
Mr McCafferty said: “In my experience in both broking and on the insurer side, I believe it is critical that Brightside Group is a winning proposition for insurer partners, customers and our investors. Aligning all three interests is key to being a profitable and sustainable broker.”
Strategy unchanged
After just over two months at the helm of the Bristol-based broker, Mr McCafferty said Brightside had the three key factors for future success: scale to invest and grow, digital at the heart of the business and, thirdly, a focus on niches. This is all complemented by our plans to launch Kitsune, our MGA.”
He said: “I’m clear about how we need to operate, and while businesses like ours will always need to be adaptable, there is no need to alter our strategy.”
Prospects
“Looking ahead, I’m excited by the launch of Kitsune, where we have big ambitions, and our niche solutions and SME businesses are well positioned for further growth this year.”
Mr McCafferty also stressed that he was open to suitable acquisitions where they made strategic sense for Brightside and to complement organic growth.
He said that while the report and accounts reflected the continuing need to correct the issues of the past, the business will continue to deal with them in a systematic manner.
“I am confident that we can deliver further profitable growth for the Group during this year and beyond.”