For someone who has just experienced the “bumpiest flight of his life”, Kevin Amphlett remains focused on the task at hand. Philosophical, but focused, too.
“I’ve no desire to be the richest man in the graveyard David,” the Chase Templeton CEO tells me over a coffee. “But I’m full of energy and enthusiasm and while that continues, with the growth potential that we have, my foot is firmly on the accelerator.”
Amphlett is in London to discuss his plans for growing the business he founded with his wife Julie back in 2002. And in spite of the apparent perils of short haul flights to and from his home on the Isle of Man, he has no intention of letting up.
Not surprising, perhaps, given the success of his enterprise. Boasting annual premium income of £50m, turnover of £7.5m and a client base of 50,000, Chase Templeton is on the crest of a wave. In fact, with organic growth of 30% year on year, it seems that business couldn’t be much better, I suggest. I’d be wrong.
“I’ve never gone into a new year where I’ve got so much enthusiasm for the plans that we have,” Amphlett explains.
Bullish words, perhaps, at a time when the country is only just coming out of recession, but Amphlett has a track record that speaks for itself. Since 2002, Chase Templeton has been acquiring specialist healthcare brokers across the country and now commands significant clout in the market. After taking over Health Matters in 2002, Amphlett made successful plays for PHA Insurance Services, Redferns Insurance Services and Private Medicalcare Limited. Perhaps the most high profile acquisition, however, was in June 2007 when Chase Templeton acquired Preferred Medical Limited, the Somerset-based intermediary that was owned and managed by former Association of Medical Insurance Intermediaries chairman Phil Taylor.
There are still funds left in what is clearly a significant war chest for more acquisitions, Amphlett suggests. In fact, two large acquisitions are ongoing; one target has premium income of £8m, while the other has £3m. If those acquisitions complete successfully, they will add £1m profit to Chase Templeton’s bottom line.
However, Amphlett clearly doesn’t want to get greedy. Yes, he has considered raising some venture capital (VC) for acquisitions and while he doesn’t rule it out entirely, he explains that he “doesn’t necessarily want a VC firm in today”.
MORE ACQUISITIONS AHEAD
Amphlett, who has worked his way up from sales roles at insurers to various broking roles before setting up one of the most powerful brokers in the PMI market, seems content to carry on with what to date has been a successful acquisition strategy.
Chase Templeton, he explains, typically pays two to three times turnover of commission for books of individual and SME private medical insurance (PMI) business. There are potential targets out there, in addition to the ones under discussion, although brokers wanting to sell up, he says, do have to get their houses in order first.
“Some of the smaller firms aren’t necessarily the best at being able to produce detailed management information on request,” he says. When considering a purchase, consolidators such as Chase Templeton need relevant accounting information and up to date management accounts.
“Essentially, all we need is the type of information that brokers should have on record to meet Treating Customers Fairly requirements,” Amphlett explains, adding that Chase Templeton offers other advantages to potential sellers.
“One advantage we have over our consolidator competitors is that we don’t usually expect owners or directors to stay on,” he says. “On a larger deal we might. But for one or two man bands, we’re usually more than happy for them to retire, which is usually the motive for selling the business in the first place. Most of these people are self-employed entrepreneurs and they’ve been put off selling because they don’t like the idea of working for someone else.”
Amphlett should have a good understanding about most brokers’ psyches. After all, he has worked on both sides of the fence and in different capacities.
After spells with Norwich Union Healthcare (now Aviva) and then with WPA’s national salesforce, Amphlett co-founded Berkeley Morgan Healthcare with Jon Pardoe, managing director of Berkeley Morgan IFA in London. Berkeley Morgan Group eventually generated annual turnover of over £11m, before listing on OFEX and subsequently being purchased by Milton Keynes-based Personal Group.
It was then, in 2002, that Amphlett and his wife Julie set up Chase Templeton Group from their home offices in the Isle of Man.
Today, the organisation offers a range of services for clients – Amphlett is very keen on cross-selling across different insurance product lines – but also a range of options for brokers who are either considering selling up or perhaps looking for some kind of commission-sharing arrangement.
Indeed, in addition to Chase’s own salesforce of some 50 employed consultants, Amphlett remains keen for brokers to join the firm as appointed representatives (ARs). After all, Amphlett explains, it is “infinitely” harder now to succeed as a directly authorised (DA) broker than before Financial Services Authority regulation was introduced to the PMI market. Becoming an AR enables a broker to earn a successful living without the burden of compliance, and could set them up for a lucrative exit at some point in the future, he says.
“If at some stage you are going to be selling your business, what a great thing becoming an AR could be,” Amphlett asks. “Due diligence? We’ve already got the tick in the box.”
Nevertheless, Amphlett is acutely aware of brokers’ concerns about signing over their independence and sovereignty. While it might seem like a good idea to become an AR on the surface, many brokers have heard horror stories about other networks refusing to return ownership of their client lists to them should they wish to become DA again.
“Client ownership is key and client ownership rests with the AR,” Amphlett says. “It’s their business. All we’re doing is providing them with a compliance umbrella and enhanced terms under which they can operate. We provide them with additional training that enables them to emulate our cross-selling success. They can take it on or not take it on but we give them all the opportunity to maximise the profitability of their business.”
Amphlett says that for the “small number” of brokers who have become ARs with Chase Templeton and grown to a certain size whereby they want to become DA again, there have been “absolutely no” issues over client ownership, although he is sensitive to what are now widespread concerns.
“It’s sensible for brokers to have questions about working under a network when one looks at some of the problems created in the market,” he concedes.
While a number of brokers have had their fingers burnt in this situation by organisations other than Chase Templeton, there is “absolutely” no chance this could happen at Chase.
“We’ll immediately sign their clients back to them so they become DA, otherwise what would happen to my reputation?” Amphlett asks. “We’re happy to facilitate that change and their clients travel with them. We would never dream about contacting their clients [to try to retain them] and so on. What tends to happen is that because we have Network Protect, they would become directly authorised and then use it to help them with compliance and to take advantage of its enhanced terms.”
Network Protect, which follows a Bankhall-style model of providing compliance advice, enhanced terms and training for DA intermediaries, currently has 55 members, a figure which Amphlett believes will grow as the burden and cost of regulation increase.
Chase Templeton has lost only two brokers to become DA again but even then, they became Network Protect members to take advantage of enhanced commission terms and so on.
“We would never fight over client ownership – that’s theirs,” Amphlett stresses again. “We make it abundantly clear in their contracts who owns the client and what will happen if they choose to leave the Chase Templeton umbrella – that they will retain client ownership.”
He adds: “I believe that a larger organisation which takes on the compliance burden is the right home for one man bands.”
What about Amphlett himself, though, I ask. When will he look to put up his feet? Amphlett, who is 52 this year, won’t be drawn, however.
He and wife Julie own 100% of the voting stock and 75% of the equity stock in Chase Templeton. That is a situation that is likely to remain in place for some time to come.
“Fundamental to our business is the fact that the remaining 25% [of the equity stock] is split between other individuals in the business,” he says. “There’s a very strong sense of ownership from everyone in the firm, from the administration team to the sales teams to management. Everybody has a stake in it.”
Amphlett says the “key” to Chase’s success is his executive team, which includes finance director Jeff Tate, formerly of Bankhall, compliance director Richard Holden, formerly of Skipton, sales director Duncan Deaves, who has been with Chase since 1997, and head of IT Gemma Harris. It’s clear that he will find it difficult to give up the day job. However, naive is one thing that Amphlett clearly is not and he is well aware that the time to hang up his boots will come, most likely via a trade sale.
“My other real option would be a listing, although since the markets are in such a flux at the moment, I haven’t given that much consideration yet. At some stage in the future, yes, it’s likely that I’ll sell up. But there are various options I could take. I could take a back seat role and employ a managing director, for example. But it’s likely that we’ll be subject to a trade sale.”
However, today would be the “wrong time” to sell, Amphlett continues. “I’d always be thinking ‘if we had just held on for another couple of years we could have doubled up’,” he says.
As Amphlett prepares to leave for another meeting, you get the impression that he will be in business for more than a “couple” of years yet and the journey ahead is going to be – if not bumpy – then at least a lively ride.