John French takes Resources in Insurance from rescue to recovery

Thursday, Mar 17 2011 by
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John French Chairman Resources in Insurance Group plc
John French, Chairman, Resources in Insurance Group plc

John French tends to laugh off various descriptions of himself as a serial entrepreneur or even a corporate rottweiler. Nevertheless, for the last 20 years he has spent much of his time working with small companies, often as a founder and occasionally as a turnaround trouble-shooter. With nearly 50 years of experience on hand to guide the management teams he works with, French is a man well versed and well supported when it comes to picking winners.

Among his highest profile projects of the past, French has been involved with quoted companies including Air Music & Media (now MBL (LON:MUBL)), Croma (LON:CMG) and Avanti Screenmedia. He currently chairs PLUS-listed Sutherland Health Group and has just emerged from two years spent re-focusing and refinancing AIM listed insurance support services company, Resources In Insurance (LON:RIIG) – a business that he originally floated on AIM as The Claims People back in October 2000.

The Claims People changed its name to Resources in Insurance in April 2008 in a move that reflected its growing focus on services that support insurance companies. However, the name change failed to fix an unsettled management team and concerns about the wider direction of the group. Those concerns trigged a decision by French in the summer of 2008 to set aside his hands-off, non-executive role and take the lead in reinvigorating the company.

In two and a half years, French has streamlined the service offering and focused on core products for insurers. The company’s flagship i-Team service offers in-sourced and outsourced claims handling solutions to insurance companies to help them deal with periods when they are under-resourced either because of staff shortages, backlogs of unexpected claims surges. A new service called Verify takes that support a stage further by providing outsourced field investigation services to check the validity of insurance claims. Finally, its latest offering is called Surety, which is a credit hire service that provides independent auditing and training services to motor insurance groups.

Having crystallised the Resources in Insurance service offering, cleared its debt and brought in high profile investment support from the likes of Rob Mitchell at Bluehone Investors and serial investor Bob Morton, the irrepressible French is clearly a happy man. He believes that 2010 will be the last of the loss-making years and that the company is now back on its feet and ready to grow.

John, back in July 2008 you found yourself back in the executive chairman role at Resources in Insurance. What was the situation at that time?

The company had been through a difficult time but to cut along story short, we decided not to appoint a new chief executive and instead I promoted a couple of very bright guys on the management team. I then spent the next six months reviewing the business. The mainstay had been the loss adjusting business, which represented something like 70-80% of the turnover, but it was totally unstable so I decided we had better get out of it. It was going to be too expensive to close it down and it was going to be very difficult to sell it, because it was a service business, so over a period of three or four months I persuaded one of the main board directors to buy it.

However, from the start I had this loss of £1.3m and the share price was about 0.2p so it was impossible to use equity to raise any money to fund the group. The proceeds from the sale of the loss adjusting business helped, and I also I managed to raise £300,000 of loan stock and all three of those loan notes have since converted to equity. By 2010 the losses had dropped to about £550,000 and we made lots of progress with the core business, which is a product called i-Team, and we then trialled a new product called Verify. Some of the directors put money into the business, our non-executive Rob Mitchell put more money in from Bluehone Investors, and Bob Morton came up with the best part of £200,000, and he is a good guy to have on board.

How has all this transition work impacted on the financial performance?

At the end of last December I made a statement that the losses would be significantly down for 2010 and the balance sheet has improved significantly. So the new year has started with no debt whatsoever, cash in the bank and a lot of new business we won late in the year has started to come through. January and February have been great for us. Verify, which we test marketed last year, has now been launched and is picking up business. We have also set up another division, Surety, which addresses a big market and there is growing interest there. So I like to think that in that two and a half year period we have gone from a rescue stock to a recovery stock and now we’re a growth stock.

How do you see the business developing throughout 2011?

What I’m doing this year is focusing 100% on looking forward. I’m hoping to put out some positive trading updates towards the end of March, early April and our results will be out during April, which will be the last of the loss making years, with significantly reduced losses. I think the first quarter is going to be very impressive.

I think I’ve got to the stage now where Resources in Insurance has become a classic example of what I do. Smaller companies never get the help they need and because of their size investors don’t get too excited. Until recently I have had one eye looking behind me and one in front, I’m now both eyes going forward. I’ve done the job, it’s a smashing business and it’s going somewhere. We have even had one or two people knock on the door with a view to taking us over but we have turned them down flat because this is going to be worth a lot more money. I think Resources in Insurance is an interesting story because a lot of the small companies never get the attention or the help they actually deserve and I think this gives confidence that there is hope.

Finally, you are not showing any signs of slowing down so what else is keeping you busy?

I’m still doing a lot with Sutherland Health, which has gone well and made a maiden profit. I’ve also got an energy project which I’m chairing but is not yet listed. I take pleasure in putting the things I’ve learned, sometimes the hard way, to good use to help small companies. I know what it is like to be a start up, it can be painful. I want to help small companies and I’m pleased when I can get involved and do a job. I’m also very choosy in what I do and that is why I’ve never had a bad one.

Thank you for your time John.

Thank you.

Resources in Insurance’s industry peers and related companies on the market include Ai Claims Solutions (LON:ACS) , Charles Taylor Consulting (LON:CTR) , Brightside (LON:BRT) , Thb (LON:THB) , Abbey Protection (LON:ABB) and CBG.

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Resources in Insurance Group plc (RiIG) is engaged in providing a range of claims related professional consultancy services, to the insurance market. The Company’s professional consultancy business consists of four complementary product lines: iteam, Verify, Surety Claims and Consult. iteam provides outsourcing capabilities within an insurer’s claims operation. Verify provides field investigation services across motor, property, creditor and liability markets. Surety Claims is a specialist credit hire audit and handling operation. Surety is the newest division of the business. Consult provides consultancy-led services to RiIG clients. Consult has also delivered training and mentoring to a number of clients ensuring that their staff continues to be developed and trained. In December 2013, Resources in Insurance Group PLC completed the transfer of its trading business and assets to its wholly owned subsidiary, RiIG Limited. more »

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