Cobra CEO Tedstone aims to hit £1bn by 2025

CEO Andy Tedstone, pictured, noted that since PIB acquired Cobra in 2019 it has grown from 82 members and £210m premium to 180 and £560m respectively.

“We have set ourselves a target of doing 40 [new members] this year, so we will definitely go through [the] 200 barrier,” he continued. “But the next milestone for me is £1bn of premium. And I want it to be a nice clean £1bn of premium from proper members.

“I don’t want it to be [inflated by parent] PIB[-owned] businesses. We have just literally put one PIB business into the network, but that is purely down to the fact it has an open market book that it needs placing and our broking desk can do it all for them.

I have always said that I would be really annoyed if a broker wanted to join a network and had not spoken to us first.

Andy Tedstone, Cobra Network

“So that is a small business [PIB has] bought, but is all schemes. Otherwise, that growth [to £1bn] will be all from new members. And I have sort of said in my head I’d like us to be there by the end of 2025. I initially said I wanted to double the size of the network when we bought it.”

Launched in summer 2021, the Cobra broking desk aims to provide members with a route to markets by offering access to an exclusive wholesale broking facility.

It started with two staff, and has since grown to six, with a seventh recruit soon to be added, according to Tedstone.

Tough to get agencies

He added: “Insurers have become a lot harder to get agencies from over the last few years; it’s really tough work to get them. And brokers don’t help themselves as well. We recently saw a broker who had £1.5m GWP, and £900,000 of that was with Aviva. And he wondered why Allianz and Axa would not give him an agency.”

Expanding on the broking desk offering, Cobra launched a new e-trade quote and bind facility, available exclusively to all its network members, called CobraQuote, in partnership with Acturis in Q1 2023.

Tedstone admitted to being surprised to find out that only 19 of its 180 brokers had Acturis systems, with Open GI and SSP the two most popular platforms.

“Our brokers told us they were going to between four and eight insurer portals to try and get a quote, but by the time you have rekeyed that for the third time, you must be thinking there must be an easier way to do this,” he continued.

Tedstone referred to brokers that had never joined a network as a ‘unicorn’, and said he believed Cobra’s prospective member “sweet spot” to be brokers with £3m-5m GWP, although it had onboarded a member with £40m GWP in the last 12 months.

When asked what he believed the population of potential Cobra members to be, he said: “Deloitte did some work recently that concluded that there was about 2500 brokers out there, and they reckoned that would shrink over the next few years to 2200, even with new start-ups.

“So, by the time you take out firms that are 100% personal lines, we sort of think that with Bravo’s 600 members, our 200, Hedron’s 150-200, Willis on about 80 and Movo, which is a different model, at 60-70, let’s call that 1000ish brokers that are in some sort of network at the moment.

“Of those that are left, there [are] probably 500-600 that are too big, not interested or too niche. So we think there might be a pool of 800 that is of interest. Which is more than enough to keep us and everyone else going for the next few years. And we presently have an active pipeline with around 700 names on it.”

Speaking to the "mushroom department"

Reflecting further on how Cobra was seeking to help its members at a time when broker-insurer relations continued to be strained, Tedstone responded: “More and more, the agency thing is hurting. You have big insurers moving lots of small brokers to digital only, whilst others have stopped doing new agencies altogether.

“We have spent a fair bit of time over the last nine months going around and talking to the insurers and their people in the SME hubs ... What we have found is that there is an awful lot of people here who are first jobbers, and they are often in the mushroom department – they are kept in the dark, don’t know what is going and they rarely get to see or hear from a broker.

“We have gone and presented to them – whether it is Aviva in Perth, NIG in Manchester or Axa in Bolton – just to make them aware of the issues small brokers face and why it is important that they support us. And why it is important for insurers to talk to brokers, rather than doing it online.”

Regulation

Tedstone concluded that, with “regulation the way it is, every small broker we talk to wants a helping hand”, and that meant the appetite for joining networks showed no signs of abating.

“I have always said that I would be really annoyed if a broker wanted to join a network and had not spoken to us first,” he ended.

“I want us to be on the list, so I would be disappointed if someone had not considered us.”

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