As one co-founder of Admiral Insurance prepares to hand over the reins to another, the pair look to the future.
When Henry Engelhardt said he was giving £1,000 to every employee at Admiral to celebrate his own departure, staff in Cardiff gave him a standing ovation. In Rome, employees making a thank-you video for him were so loud that executives on another floor started checking their phones for reports of an earthquake.
Continuing the rock star riff of his farewell tour, Engelhardt recently spent several days being followed by film crews in France, where news of a corporate boss gifting £7m to his staff seemed to chime particularly well.
“You were being filmed on the TGV and someone said to us, who is it, who is it?” says David Stevens, who was Engelhardt’s second hire at Admiral and who will in a few weeks fill his shoes as chief executive.
“It’s Clooney! It’s Clooney!” interrupts Engelhardt, laughing at the story of his surreal week getting closer to celebrity status than most car insurance executives can ever hope.
Based in south Wales since its foundation in 1993, Admiral has won a slew of best workplace awards and grown from zero to £5bn while avoiding the mis-selling scandals that have dogged many peers.
Engelhardt, Stevens and a handful of other founders picked the name Admiral to evoke a long-established pedigree, and get themselves to the top of the Yellow Page listings.
Both men are keen to stress that the foundations of the firm were a team effort, even if Engelhardt’s energetic manner has been most visible, from the “Henryisms” that pepper each set of annual results to his quotes about service that adorn the group’s offices.
Stevens, however, agrees that Engelhardt’s decision to step back into a supporting role after 25 years will be keenly felt. “Henry was the catalyst and has been constantly thinking about taking the culture forward, but it is deeply ingrained in the management team now.”
Some say that the changing of the guard might coincide with tougher times for Admiral, as premiums begin to rise and its price comparison website, Confused.com, reaches saturation point.
“Both of us are really upset that the share price is at a record high,” says Engelhardt, with a grin. “I’m sitting here thinking, ‘I announce my retirement, and since then the price has gone up £5, oh my goodness’. While David’s sitting there thinking, ‘He’s leaving me and it’s at the record high, what do I gotta do?’”
The pair bounce off each other like old friends. They met at the Insead business school in France, Engelhardt after trying sports journalism and commodity trading in Chicago, Stevens fresh from the Cadbury’s graduate scheme.
After completing their studies, they went their separate ways into Churchill Insurance and consultancy at McKinsey respectively. A Lloyd’s broker brought them back together to set up a new car insurer, which they chose to base in Cardiff.
“I mean, we were trying to get from Monday to Tuesday, much less get into the FTSE 100,” says Engelhardt. “We did have a vision in the early years. I’d say to new starters that in 10 years I want this company to have a value of £1bn. After about two or three years I stopped, because it just sounded so absurd.”
The firm was taken over by the private equity arm of Barclays in 1999, after its new Bermudan insurer owners “opened a drawer and found Admiral selling car insurance in Cardiff. This was a point when the market was terrible and getting worse, and they just said ‘Get rid of them’. We were out on the street, we didn’t have many choices, the market was terrible, and in stepped private equity and paved the way,” says Engelhardt.
“When you get in with private equity there’s only thing for certain, that there’s another transition coming. Because they’re not going to stick around forever. But we’d done well, and our private equity owners had doubled their money by the time they got to exit.”
Admiral floated in 2004, with a value of £776m and a windfall of roughly £37,000 each for hundreds of members of staff. Engelhardt still owns more than 11pc of the company, while Stevens holds 3.4pc.
This structure means twice-yearly meetings with investors over in London, but largely the shareholders leave the team alone to get on it.