Minster reports £1.1m profit as CEO predicts bright future for ‘resilient and digital ready’ business
We have reported a £1.1m profit for 2019 (2018: £1.9m) on a turnover of £34.1m (2018: £35.1m) in our annual report and accounts. CEO Shirley Woolham said the result was “a considerable achievement in light of the exceptional trading conditions created as a result of Covid 19.”
Commenting further on the results, Shirley said the pandemic had impacted new business volumes after official figures from the Compensation Recovery Unit (CRU) showed a 40% drop in motor accident injury claims between April and June 2020 compared to the previous quarter.
She said: “It’s been encouraging to see new business volumes gradually returning to more normal levels over the past few of months, but the market is still volatile. We’ve seen far less volatility in bike related claims, one of our specialisms, where we serve around one-third of the entire market.”
“2020 has, however, been a watershed year in that we have secured a number of new contracts as well as launching our fully operational digital claims operation and customer portal. Digital will be the standard way to manage volume injury claims in the near future.
Our digital claims journey now supports over 80% of our customers with satisfaction scores well in excess of 90%. It has been transformative for customers and our business partners.
“This leaves us well-positioned to take advantage of the changes in the volume RTA claims sector in April 2021, as insurers and brokers look to more innovative partners who can provide efficient, scalable and customer-led claims solutions for a post-reform world.”
Shirley explained that new contracts accounted for £2m of increased distribution costs (2018: £22.4m) during the 2019/20 financial year, with the income benefit being realised over the next few years.
“These new partnerships point to our long-term resilience and the value we can derive from a digital claims servicing proposition. We have leveraged our early investment in digital technology to transform and streamline our operations and how we best serve our customers.”
She also pointed to continuing improvements in business efficiency, after reporting a 5.4% reduction in the ratio of administrative costs to turnover, on top of the 21% administrative cost reduction delivered in the previous year.
“These are the hallmarks of a highly efficient and scalable operating model, critical to firms looking to compete in a post-reforms world. Business re-engineering to this degree is challenging and I’m delighted that we achieved an overall reduction of over £2.2m YOY as a result of transformation program.”
Shirley said at the start of the pandemic Minster Law went to fully remote working in less than 48 hours. “It was relatively painless; our IT and telephony infrastructure are all cloud-based and our digital operation fully-established. Our people were already working flexibly.”
Commenting on the challenge of claims progression during the pandemic she added: “We’ve worked closely with insurer partners, TPIs and supply chain partners to implement protocols to avoid bottlenecks and keep cases moving. We have long championed the case for greater collaboration and it’s our hope that the industry will continue to do so in future – the response so far has been amazing.”
She said the claims industry can learn from the impact of the lockdown on injured claimants and embrace opportunities to use technology to make their claims journey easier. “Over 80% of our customers were very satisfied with remote medical assessments. We believe these high customer satisfaction scores stress the huge value we can unlock from further digitisation of the claims process.”
Well-prepared for April 2021
Shirley said that Minster Law will continue to transform itself in preparation for the new small claims portal in April 2021, although “there are still some significant challenges to be overcome before I can say with confidence that the portal will do what its proponents hope it will.”
“In the meantime, we will take forward plans to ensure that our footprint continues to match our ‘digital first’ strategy and that we have the right skills and talent in the organisation to become the most successful legal services business in the high volume, low margin PI sector.”
“Minster Law is future ready, but – as the pandemic has shown – change is now a constant and the ability to flex our model to benefit from change is now a core corporate skill.”
While organic growth is key, Shirley made clear that, thanks to a strong balance sheet, net assets in excess of £46m and a progressive investor in BHL Group, Minster Law will always consider inorganic growth opportunities where it makes strategic sense. “We have no real interest in acquiring PI law firms or WIP books – any acquisition we consider would need to be more strategic than that – contributing to extending our capability or helping us to develop better ways of serving our business partners and customers.”