When James Rogers approached Business Partners Limited for a loan in 2003, he was looking for financing that would be a first for the small and medium enterprise (SME) financier. What James wanted to buy was a short-term insurance brokerage – not the building or the furniture, but a list of client names, their goodwill and the fixed monthly income of that client list. Never before had Business Partners Ltd been asked to make the purchase of a non-tangible asset.
Having founded Bettercover, his own brokerage, five years previously James was ready to expand and the retirement plans of a trusted colleague offered him the opportunity. “None of the banks I approached understood the nature of the transaction, but the two guys from Business Partners Ltd were willing to listen until it made sense to them,” remembers James. “Even then they were worried and insisted on a covering bond on my house as surety.” Some of the clients James acquired through the transaction Business Partners Ltd financed are still with him today.
Since that nervous and courageous start, the relationship between Bettercover and Business Partners Ltd has flourished. In 2004 James secured a loan to buy a property in Edenvale to convert into offices for his growing business and in 2006, 2008 and 2010 Business Partners Ltd financed the acquisition of three more brokerages. “By then they understood my game and were comfortable to finance Bettercover,” says James. “I appreciate the fact that they were willing to take a chance on me back in 2003 and we’ve done good business together over the years.”
The most recent transaction was in 2019 when James secured a second property loan to buy the building in Boksburg that is now Bettercover’s home, and from where James and his two daughters provide the kind of service that sets them apart in the highly competitive short-term insurance market.
James ascribes Bettercover’s success to focus and networks. “We are short-term insurance brokers only and we only deal with qualified clients, that is people who are referred to us,” he explains. Having discovered early in his career that long-term and life-insurance brokers often turn away short-term business, James has built a network of colleagues that send those people his way. The providers work together to ringfence their joint clients, an effective way to keep competitors out.
This does not mean that Bettercover is a run-of-the-mill insurer. Home, vehicle, business and professional-person insurance do make up the bulk of the business, but James and his team also provide specialised cover, such as for vintage vehicles and goods in transit. Furthermore, with around 1 300 ongoing clients and a total insurance book of almost R40 million in annuity income, Bettercover is big enough to get premiums from the insurance underwriters that compete with what corporate brokers offer.
Add to that the fact that the company handles all its own administration – from issuing policies to handling claims – and it is easy to understand why James is currently negotiating with two brokers nearing retirement age about slotting their businesses in with Bettercover.
With both his daughters shareholders of Bettercover, the business continuity plan is sound. But, says James, he’s not quite ready yet to take a back seat. “I will probably never leave because I love this business, I love chewing the fat with my clients. People and marketing are my passion.” The passion that Business Partners Ltd first recognised and trusted me with more than 20 years ago.