Pavilion's online journey
Article Date: May 12 2006
Serial entrepreneur Andrew Selby launched Pavilion Insurance, insurer of musical and photographic equipment, bikes and fishing gear, in 1997 and guided the group to flotation seven years later. Now generating annual premiums of around £2 million, he is overseeing the company’s expansion into France.
Try to see the big picture early
Eventually, it became clear that the best option was to utilise the internet even more than we were. By using it for policy processing we wouldn’t have to handle our clients at all, as they would do the paperwork themselves.
In retrospect, I’d say the main thing you must realise with technology is that doing more in terms of business offering doesn’t necessarily mean you have to do more work.
I used to assume that the more work we picked up, the more staff we’d have to hire to deal with the load. That just isn’t the case these days. Had we identified this earlier, we wouldn’t have been so far down the wrong road and turning around would not have been as painful.
Don’t underestimate project costs
Before we made these changes our growth activity meant we had little time for planning in other areas of the business, so much so, in fact, that Pavilion Insurance started to fall behind other companies in terms of our technological expertise. In truth, I had failed to envisage the massive trading issues we’d encounter with our original strategy and by 2003 we realised we’d have to do something radical to regain the ground we were losing to our competitors. We started to build a new software system and that made a huge difference, although we underestimated the associated costs and this resulted in a 12-month delay.
If I had known then what I know now I would have allowed a lot more time for planning, and I would have foreseen the dislocation that 18 months of system development caused for our business. It was a tough lesson but an important one.
Costly mistakes
We resolved to float the company on the stock market in 2004 for several reasons. Obviously, an AIM listing meant we could offer employees share options and involve them more in the business and it also provided me with an opportunity to crystallise my own holding. Yet the really big benefit of flotation was that it brought in cash. At the time, I was still coming to terms with how many changes we’d have to make and how much the process of overhauling the business would cost us. The float proceeds enabled us to put everything in order. Yet, with the benefit of hindsight, had I realised this earlier I’d have been able to make changes more gradually and could have hung on to a greater stake in the company as a result.
Think laterally
Once we’d started to think more seriously about web delivery, it opened our eyes to other opportunities, too.
One idea we subsequently came up with was to establish a web operation in tandem with a bicycle seller. He was selling around 30,000 bikes a year and offering each customer a service package on top. As people signed up for this service, their information was populating a database and, through working alongside him, we began to realise we could approach those who had given the appropriate data-protection act sign-off and offer them insurance on their bikes. We initiated the scheme earlier this year and so far it has worked out very well for us.
Take the internet seriously
As a business that trades predominately online, one thing we had to learn very quickly was that if you don’t appear on the first page of search engine results when people are looking for services like yours, you might as well forget it!
These days we invest a considerable amount in ensuring that we’re in the top two or three hits on relevant searches and we now employ three people to continually re-optimise our website to maintain this. As 85 per cent of our business is now completed online, it’s safe to say we’ve made considerable progress in this area.
