Buoyant sales growth European expansion Launch into the extended warranty market
Despite turbulent economic conditions since the summer of 2007, SPB succeeded in maintaining significant growth in 2008. Net brokerage fees rose by 12.6 per cent to €60.6 million, compared with €53.8 million in 2007. This increase consolidates the previous years’ gains and is well ahead of the 7 per cent average growth rate for the brokerage market. SPB’s operating profit is expected to reach €5 million under the new International Financial Reporting Standards (IFRS). The principal growth drivers in 2008 were: - a robust market for bank cards in France - development of our mature subsidiaries in Spain and Italy - consolidation of our positions on the French market for new-technology insurance (mobile phones, handheld devices, etc.) - growth in the retail sector, boosted by the extended warranty market and a sharp increase in sales at the year end.
2008 highlights
SPB expanded at European level by opening subsidiaries in Switzerland, Portugal and Poland. Two others are being set up in Greece and Romania. In addition to attracting local customers, these new subsidiaries will cater to the requirements of international clients seeking a pan-European offering. In 2008 contracts were signed with Carrefour in Italy and with Orange in Spain and Switzerland. At present SPB works with some twelve European accounts, including Avenir Telecom, Carrefour, Darty, Fnac, Fujitsu Siemens, and Game.
SPB launched into the extended warranty market. Fully aware of customer expectations, retailers have started to offer extended warranty protection to prolong manufacturers’ warranties. The extended warranty market – the largest segment of property insurance, ahead of theft and breakage – offers considerable potential for SPB, especially given our justified reputation as a leading property insurer. In 2008 SPB launched warranty extension programmes with several retail networks including Fnac, Surcouf, Micromania and Carrefour. At present, it insures flat-screen televisions, handheld devices and hi-tech equipment in general. These products also benefit from a major SPB innovation, namely the possibility of swapping a broken device for an identical new product.
Commenting, SPB Chairman Jean-Marie Guian said: “With this service, which is unique to the European market, we have taken a major step in a new direction. The extended warranty market is changing radically as a result of technical constraints and increasingly stringent customer expectations, so our replacement offer is a perfect solution. We are already leaders in theft and breakage insurance for high-tech goods, so we are consolidating our position as an innovative insurance broker and providing a new approach to the promising European market for product breakdown cover”.
Acquisitions: Between July and early October, SPB acquired three Paris-based affinity insurance brokers: D&P Affinity, IFEBO and AVI. All three form an excellent fit with SPB, offering: - access to new markets such as the automobile sector, computers and electronics (Fujitsu, Siemens, HP, and Toshiba), and major food retailers - an additional opening in the travel and leisure insurance segment - consolidation of geographic coverage in countries such as Spain and Portugal as well as in Central Europe, where SPB is already present but wants to grow its business - complementary teams and business know-how, thus enhancing our range of affinity products. The current SPB team grows by a further 30, largely to strengthen our Paris sales force.
SPB’s dynamic HR policy resulted in 80 new hires in 2008, further strengthening the company's position as the top employer in the Le Havre region of northern France. Of these new hires, 40 were newly created positions, mostly at managerial level, including a planning engineer, an IT project head, an outsourcing manager, a buyer, trainers, coaches, and a chief accountant.
In addition, SPB implemented the provisions of a new law allowing employees to cash in some or all of their accumulated holiday time. In 2008 40 per cent of managerial staff took advantage of this facility.
Key figures: 300,000 claims handled 1.8 million inbound phone calls 3.7 million items of correspondence processed (inbound and outbound) 676 employees at the end of December 2008, more than 300 of whom specialised in insurance services
Major projects for 2009
► Pursue European expansion, especially with our international customers, including banking networks such as BNP Paribas and the Crédit Agricole Group, specialised and general retailers including Carrefour, Fnac, Darty, and Mediamarkt, and telephone operators such as Avenir Telecom and Orange
► Search for new sources of external growth, in France and abroad, especially small companies. Several projects are currently being examined
► Consolidate our development in new activities such as warranty extension, customer loyalty and telemarketing, as well as in new sectors like mass retailers and utilities
► 2009: a focus on Quality - Obtain NF345 certification and renew ISO9001 v2008 certification - Bring all service-quality functions together in a single entity - Launch an inter-departmental quality charter within the company
► Modernise our IT system by reviewing the business-line applications used Group-wide (including international subsidiaries) and develop multi-channel sales, especially extranet sites for policy holders
In 2009 SPB expects net fee income to grow by approximately 12 per cent to €68 million, of which 7 per cent from international operations (compared with 4 per cent in 2008).
N.B.: The 2008 figures are still provisional pending validation by our statutory auditors
