Sam White, car enthusiast and founder of Freedom Services Group, an auto insurance company, is launching Stella, a brand for female drivers, this year.
White tested the idea in Australia, launching the brand in July 2020, amid the first wave of the Covid pandemic.
The 46-year-old started her first car insurance business, Action365, from her sister’s conservatory in Stockport in 1999, just three years after leaving university.
The Stockport-based company now specializes in selling car insurance, primarily through price comparison sites. The UK group had a turnover of £23m in 2019 just before the pandemic, but Covid hit the business hard, with turnover down to £10m in 2020 and 2021 , as drivers stopped using their cars and the 240 employees had to be reduced by 30%. .
But the company has recovered well, largely thanks to the launch – in 2020 – of competitive black box insurance policies, where monitors are fitted to cars to help manage risk. After a loss of £5.5million in 2020, the group made a pre-tax profit of £450,000 last year.
Did you think you would get where you are?
I’ve always thought of myself as an entrepreneur, but never imagined my business would grow to the size it has. I gave up job security and the ability to travel when I started on my own, but I made money right away.
Not: Manchester, April 11, 1975
Education: 1987-94: Kingsway school, Cheadle (seven GCSEs, BTEC in automotive technology, four A levels)
1994-96: University of Bolton, left psychology degree after two years due to family crisis
Career: 1997-99: worked for the automobile claims company, Motor Law; becomes head of national accounts
1999: Launch of Action365
2015: Pukka Insure, underwriting activity
2016: Opening of Freedom Brokers, direct sales to consumers
2020: Launch of Stella insurance for women, from Australia
Lives: Lach Dennis, Cheshire, with his wife Jennie Guay; she shares custody of her daughter, eight, and son, six, with his ex-wife.
At 13, I was desperate to learn to drive and bought my first car with some money inherited from my grandfather. It was a convertible Triumph Spitfire, built in 1975, the same age as me. It cost £1,500 but I sold it for twice as much when I was 17, having done it in the garage with my dad. We had two garages and my parents loved classic cars.
My dad agreed to teach me to drive in a B&Q parking lot, so I learned at 13. I still couldn’t use the car at 17 because I couldn’t get insurance. The premium was around £3,000 a year due to my age.
I sold the Spitfire and bought a Morris Minor for £1500. This car was 27 years old so I could get classic car insurance for £800. The vehicle had to be 25 years old to be considered a classic car. At 17, I already knew some of the anomalies of the auto insurance industry.
Do you consider your first million pounds a major milestone?
I first topped £1m in pre-tax profit in 2007 when, with 100 employees, the business made £1.57m. I didn’t really pay attention to the figure. I remember my accountant telling me that I was now officially a millionaire, and I felt pretty shocked.
I was more focused on growing the business and finding new opportunities. In 2010, I used some of that profit to invest in an auto claims business in California. It didn’t take off the same way as here, but it was a great adventure for two years. I had to fly home because the UK business was under pressure, due to changing regulations.
Has the coronavirus pandemic affected your business?
It was devastating. Our business was affected almost immediately because once we were in lockdown people stopped driving.
We had to restructure, laying off 80 people. It was the hardest thing, having to make those decisions. I wanted to focus on the 70% of people we could keep.
Being leaner now than before the pandemic has helped improve profitability. We use technology more efficiently. I think customer expectations have changed during the pandemic. Today, they want more flexibility and to be able to buy insurance only when they need it.
Did you have to diversify to survive?
Absoutely. Before the pandemic, we didn’t have black box insurance. We had a very successful launch in August 2020. This is insurance that partly bases your premium on your driving behavior. We provide a special black box for your car to get data for us to analyze. It’s like a Fitbit in a car.
People got frustrated with the closures, paying for annual policies they weren’t using.
Also using black boxes, we are now developing mileage insurance, a new product that should be available as an option by the end of the year. We already have about 30,000 customers with black box technology, so they could choose to purchase mileage-based insurance if they so choose. Drivers who drive fewer kilometers would benefit from lower premiums.
Have you had difficulty recruiting staff?
Yes, there were a lot of resignations, with people looking for another type of life. The pandemic has caused them to reevaluate what they really want. We compete with companies in London, which offer higher wages and allow staff to work from home.
For me, it is above all a question of working on the atmosphere of the office, of trying to make the environment as pleasant as possible. Although we cannot offer the same salary as London employers, we are also offering staff the option of working from home. I’m still president of the company, but I’ve replaced myself as general manager with a psychologist/business coach, and the team dynamics have improved considerably.
What was the most difficult period of your career?
In 2013, I had to liquidate my auto claims business in Los Angeles. It was my first taste of failure, and it wasn’t sweet.
The claims side of the business in the UK needed me at the helm as there were changes in UK regulations. We were hit with a 60% loss of revenue in four weeks after the government cut the fees lawyers could charge for handling traffic accident claims.
I had to downsize and then diversify into other areas of the market. I started working for other insurance companies, providing third party intervention. This is where the insurance company insuring the customer responsible for an accident seeks to offer support to the innocent who was also involved. The idea is that this should speed up the process and save the client’s insurer money.
It was touch and go for a good 12 months trying to balance the books. Of our 350 employees, we had to lay off 250. I used money from our reserves for severance pay, but it left us with zero in the bank.
What was your best preparation for business?
I sincerely believe that my difficult childhood was the best preparation. To settle on your own, you need an enormous amount of emotional resilience. It only comes from going through tough times. My mother was a dysfunctional alcoholic most of my school days and it was very hard on me and my sister. My dad tried to be both parents.
What is your basic business philosophy?
Always be open to change. There are a lot of changes in the insurance market now because there are so many new technologies. People want to do things differently all the time.
I just want to have an open mind and stay in touch with people inside and outside the industry. I’m always receptive to new opportunities and new technologies, because I can’t afford to be left behind. My strength is that I am good at new concepts. You can always find someone who can develop new technologies. The important thing is to learn how this technology relates to what you are trying to accomplish.
What do you consider an indulgence?
I like to spend my money on experiences, like going on the Inca Trail, and I once drove a Lotus Formula 1 car on a track in France. Over the years, my indulgence has been cars that I keep for a year or two just to play around with. I’ve had Lamborghinis, Ferraris, an Aston Martin and a TVR. The most expensive car I ever bought was a new Lamborghini Gallardo in 2009, for £140,000.
Do you want to keep working until you drop?
I love what I do so I can’t imagine ever wanting to be involved in business. I will definitely create more flexibility in my schedule to accommodate my children, but do I see myself outside of the industry? Absolutely not.
Have you set up a pension?
We have a staff plan, but I opted out. I don’t really like the idea of a traditional boarding house. As I am self-employed, I accumulate equity in my business which should eventually constitute my retirement fund.
Do you believe in giving something back to the community?
In September 2018 I joined a group of 15 insurance professionals to do a Mont Blanc trek. We got individual sponsorships to complete the trek, and it was quite difficult as the lower slopes are very steep. The plan was never to take the top. I raised £8,000 for an Alzheimer’s Society movement, Insurance United Against Dementia. Between us we have raised over £100,000.