Gaps in the market can often help brokers grow and develop their business but sometimes they are also the perfect way to enter the industry.
This was the case for Michael Gottlieb, managing director of BizCover, and he hasn’t looked back since a challenge presented itself in a key area of insurance.
“I was working as a strategy consultant and extremely keen to start my own business,” Gottlieb told Insurance Business.
“My business partner Gavin Donner and I spent hours discussing ideas and looking at different opportunities. Then a Venture Capital firm focusing on early stage technology companies mentioned to us that they were unable to get D&O insurance for their investee companies, and without D&O they were finding it difficult attract non-executive directors to assist them in commercialising their technology.
“Our view was simple: insurance is a risk. Quantify the risk, price it and quote it. It should never be uninsurable.
Gottlieb and Donner soon discovered this was an industry-wide issue, so they put together what they thought was a comprehensive research report highlighting the opportunity for insurers. "Armed with our document we approached insurer after insurer and were consistently told we were crazy,” Gottlieb said.
However, both partners resigned from their consulting roles and set up their business in spare bedrooms at home with one phone line for phone, fax and dial up internet – a mark of how far the business has come as a double winner of Top Ten Brokerages ranked by Insurance Business.
As the business began to take off, Gottlieb said that competition in the market from a major international insurer saw the focus shift to PI for accounting and financial services firms which had seen premium increases as high as 300% following the collapse of HIH.
A specific exclusion “which was unacceptable for accounting firms” was another road block but Gottlieb was able to utilise the skills of his wife Kerry, who is a lawyer, to work around the exclusion with another major insurer.
“Kerry drafted an endorsement which we sent to Allianz
. They agreed to utilise this wording for our clients.
“Through this we won our first client and then called every other accounting firm on the BRW top 100 and said ‘do you know you have this exclusion and we have a solution to remove it.’ To cut a long story short we became one of the largest brokers to the accounting industry. At our peak we were the broker to 20% of the BRW Top 100 accounting firms.”
Gottlieb said that he has been “extremely lucky and fortunate to have loved coming to work most days in the past 15 years,” as the relationships within the industry helped him decide “very early,” in his career that insurance was the right path.
“I loved the interaction with both the insurers and the clients,” Gottlieb continued.
“The work is extremely stimulating. We often say brokers have the choice of being a ‘post box’ between the two stakeholders or really looking for ways to add value to the supply chain.
“We chose to be the latter.”
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