Ciaran Mulligan recalls his journey as early stage entrepreneur and how he has grown his insurance firm.
Q: How is the insurance industry in Ireland performing?
The insurance business generates €25bn in premium income – domestic and overseas – and employs 27,000 people directly with thousands more employed indirectly in additional services and support activities. The industry contributes more than €1.6bn in taxes to the Irish exchequer each year.
The insurance industry in Ireland is currently facing some significant and well publicised performance challenges – this is most evident in the motor (mainly car) and liability insurance markets.
From end 2012 onwards, the market began to experience an increase in the frequency and severity of injury claims and this deterioration in performance has continued in the intervening period.
It is difficult to be precise about the causes of this adverse claims trend, however there are a number of factors cited by the industry including the adverse impact of a protracted period of recession, an increased propensity on the part of consumers to claim, reduced law enforcement (arising from Garda cut-backs), increased road usage as the economy begins to recover and a gradual return to more normalised levels of injury claims following a period of exceptionally low claims frequency. This has been compounded by a change in the treatment by the Courts of injury claim awards.
Insurers have reacted to this adverse claims trend by strengthening their claims reserves (monies set aside to cover likely claims costs), which in turn is now being reflected in both increased prices to the consumer and reduced capacity in the market (as insurers become more selective about the business they will now take on).
Whilst almost all consumers are now experiencing double-digit price increases, the reality is that many consumers are experiencing increases of a far greater magnitude in circumstances where they have been unfortunate enough to have had a claim in recent years
Q: What are the key challenges for the industry and what are you doing differently to the competition?
In response to this market dynamic of rapidly rising prices, Blue Insurance has recently launched its two-year car and home insurance products which a first of their kind for the Irish market.
Initial consumer sentiment towards these innovative products has been hugely positive. Consumers like the fact that it’s a differentiated product offering with price certainty and the opportunity for real savings at a time when car insurance prices in particular are increasing quite dramatically.
Q: What motivated you to set up Blue Insurance back in 2003?
The motivation to set up Blue Insurance was to be my own boss and to be very successful. Myself, and my former business partner Rowan Devereux knew we could do a better job than our competitors in the market at the time. We definitely lead the online insurance purchase revolution with up to 95% of sales purchased online. We soon became Ireland’s leading niche insurance specialist with brands such as Multitrip.com, gadgetinsurance.com, carhireexcess.com and petinsurance.ie, adding new products and brands each year in both Ireland and the UK.
Q: What were the challenges establishing a new insurance company in the market and what support or advice did you get at the time?
There are numerous challenges in setting up your own business. One key challenge was to provide an online booking solution and like most companies we outsourced our web development. Within a year we knew that development costs would escalate as we expanded so we decided to employ the owner of the outsourced development company as our IT director. We now employ eight talented and dedicated developers in Blue Insurance and are looking for more. Other key challenges included competitive rates, brand building, regulation and capital funding.
Q: How did you fund the start-up at the time and what advice do you have for other entrepreneurs in the start-up stage?
We actually funded the start-up ourselves after generating business from day one. We were lucky to have obtained an overdraft facility from our bank but we never had to use it thankfully. I would suggest that all start-up’s research funding options from various sources before they start their business. There are a significant number of grants available from R&D to employment grants. Enterprise Ireland will give helpful advice to any start-up.
Q: What is the best advice you got?
Never be afraid to fail and never take your eye off the business. Always challenge yourself and your business. Be innovative, be different and never fear trying something new.
Q: You recently announced you were expanding the business with the creation of 100 new jobs. How important will this be for the future growth of the firm?
New jobs are very important as we are planning significant growth over the next few years. We will be moving to new larger offices in the next few weeks and our target is to grow turnover to over €50m. Growth will come from car and home insurance, a new and pensions division as well a new outbound call centre team for our niche insurance products.
We recently opened a new office in Cardiff for our expansion in the Pet Market in the UK and have hired four new staff there. We also plan further international expansion.
We are currently recruiting for call centre operatives, .net developers, sales staff and junior management for our Dublin office.
Q: How have you grown the international arm of the business? And are there new opportunities in other markets that you want to explore?
Around 50% of turnover is from outside Ireland, mainly UK with a small amount from Australia. We are planning to bring our two-year car and home insurance to the UK market as well as growing our niche products there including gadget insurance and car hire excess.
We recently launched our own Multitrip.com.au website in Australia distributing our product through price comparison websites and that is growing steadily. We plan to launch car hire excess and gadget insurance in Australia. We also plan to bring our niche products to UAE and the US market.
Never be afraid to fail and never take your eye off the business. Always challenge yourself and your business
Q: How important is your team to the success of the organisation?
I believe no company can be successful without a great team. Luckily, I have amazing staff who are so dedicated to the company and very proud of the success of the business and all of the achievements we have reached so far.
Since the buyout of my former partner, I have strengthened my senior team in all departments and we are now prepared for sizeable growth both domestically and internationally.
We have won an award every year since opening and have been voted Deloitte Best Managed Company for the past three years. We recently won our first award in Australia with our Multitrip.com.au brand.
Q: Do you have a leadership style and how do you motivate the team?
I like to keep involved in all aspects of the business were possible. I delegate as much as possible to my senior team. At the moment I sit in the middle of the office so I hear what’s happening in the business on a daily basis, but that will change in the new office as we continue to grow and expand.
Our team is motivated by the success of the company which continued to grow during the downturn in the economy. We only had one pay freeze during the recession and a number of pay increases. The company is also involved in a number of CSR projects in which all the staff get involved in.
Q: With regard to future plans and opportunities, what do you hope to achieve in the next 12 months?
Our plan is grow the turnover to over €50m from €21m in the next few years. Over the next 12 months we will introduce our new CRM platform through Salesforces and Genesys our new telephony platform. This has involved a significant level of investment by the company and we are looking forward to implementing substantial changes and improvements to our processes over the months ahead.
We are also taking our first steps into the life and pensions market and we also plan a major assault into the UK pet insurance market in the next few months which is one of the fastest growing insurance products in the UK.
Internationally, we plan more expansion in the Australian market with our carhireexcess.com and gadgetinsurance.com brands. The UAE is also on our target list for 2016 especially as we own key insurance domains in the UAE. We also plan to bring gadget insurance to the US Market sometime in late 2016.