Direct Group looks to ‘double size’

Direct Group said that it is relocating its head office to a larger site after “rapid expansion” within the marketplace.

As well as Doncaster, the group has operations in Elland, Manchester, Preston and London.

There are currently 120 people housed in its Doncaster headquarters, but the capacity at the new site, Quaypoint, which is close to its current location, is 380.

“We would look basically to treble the size of the business in Doncaster over the next three years,” CEO Derek Coles told the Yorkshire Post. He said the current premises in the city is “bursting at the seams”.

In the last three years, the group as a whole has more than doubled in size, from a turnover of £9.6m in 2009/10 and from a headcount of nearly 200. “We are now intending to do exactly the same again over the next three years,” said Mr Coles.

Direct Group was founded in Rotherham in 1990 and moved to Doncaster around 15 years ago. The group handles claims, underwriting, distribution, validation and other services for some of the largest insurers in the country, including Aviva, RSA and AXA. It also has an insurance broking arm and a direct-to-the-consumer brand, Simple.

In November last year, Chicago-based Ryan Speciality Group, which was started and is run by Pat Ryan, the founder of major broking firm Aon, took a majority stake in Direct Group. This deal saw private equity house LDC exit the group. Management still has a share in Direct Group.

Mr Coles said: “Pat Ryan found sufficient attraction in the management and the business to come from Chicago to buy a business in Doncaster.

“He brings with him a significant business from the States which already has a $3bn turnover and we will use all of that international power and backing to extend our business.”

Ryan Speciality Group has already given Direct Group a platform into Europe.

Direct Group was previously owned by Barclays Private Equity until 2007 when Mr Coles led a management buyout backed by LDC.

Mr Coles had formerly worked for Barclays for 23 years, the last eight of which as managing director of its insurance business. He stepped down from that role around a decade ago and went into private equity backed-insurance related assets.

“In 2006 I came to Direct Group for Barclays Private Equity essentially to sell it,” he explained. “It was a fantastic business.

“The insurance platform that 
it had, which I felt could be 
utilised for a wider set of products and services, together with the people convinced me that rather than sell it I should buy it myself.”

Following the deal, a diversification strategy was launched to turn the business into “a broad insurance services business”.

The business expanded into areas such as property, travel and mainstream personal lines insurance. “Ninety per cent of what we do is all consumer-based products as opposed to commercial,” said Mr Coles.

Mr Coles praised the calibre of workers in the Yorkshire area.

He said: “The quality of the individuals is superb. We draw from Sheffield, Leeds, a number of quality universities, and I find them a particularly willing, loyal and very intelligent workforce.

“We had no problem attracting the right talent in that site compared to some of the others.

“That has given us the confidence to make the scale of investment that we have in Doncaster.”

Direct Group’s new HQ is due to be opened at the end of June.