Rocketing growth at innovative software business
The latest in our Northern Growth Accelerator series of interviews, in partnership with EY, profiling exciting, fast-growth businesses from across the North.
Insurance software developer CDL was founded 40 years ago when now chairman Tom Hogg saw an opportunity to computerise businesses’ existing paper based systems. Of course, the technology that the Stockport-based business is built on today didn’t exist back then and continual innovation to not just survive but to grow and thrive is in its DNA.
CDL’s client base is high volume retail insurers who typically sell online, mainly through aggregators or price comparison sites, including Sainsbury’s Bank, Tesco Bank, Swinton Insurance, Brightside Group and Ageas Retail. It processes 700,000 insurance quotes a day with up to 11bn computer transactions a month.
Today, CDL employs more than 650 staff and has a turnover of over £47m. Its growth started to rocket around 5 years ago, when its main software platform Strata took off.
Andrew Wormleighton, director of software and technology at CDL, said its success came from not just moving with the times, but always anticipating what’s coming next – and the secret to correctly anticipating what’s next is to always keep your customer’s customer at the front and centre of your mind.
Wormleighton has himself been with the business for more than 20 years, having first been employed to create the company’s first ever website before moving up through the ranks.
“That’s not always looking at financial services but trends that are appealing to consumers – often it is about making it as easy as possible for people to do what they want,” he says.
“In retail insurance there are more commodity elements – travel, pets, cars are not niche areas. So we often look to the best online retailers. Amazon is the best e-commerce practitioner and financial services are still a long way behind that,” added Wormleighton.
The company also recognises that it needs to continually invest in its people. Wormleighton said it was essential that people employed by the firm enjoyed what they do if they are to remain engaged.
Last year it set up an incubator with the purpose of getting from an idea on a whiteboard to prototype between two to 6 weeks. “That’s about investing time rather than cash – and giving the staff the time. It’s a hot house for development and the tech staff love it,” he said. “Our day job is building software and the incubator is the seed of innovation and bleed out.”
Wormleighton added that while isolated fast failure is fine, it cannot be sustained so it was important that the majority of bets the company places on new technology and consumer buying trends are right.
“You don’t always know you are backing the right future thing but you do have to back a high proportion of winners. Some of that is gut, some is luck and for some things you look to other sectors,” he said.
So what are the next developments the company is working on and where will future growth come from?
CDL continues to focus on end user experience and the platforms consumers will be using in the future, to make sorting insurance cover as quick and easy as possible.
“The end user with a phone in their hand has a lot of expectations. Our job is to get rid of the hurdles – ‘3 clicks and you are covered’,” said Wormleighton.
Right now it is working on next generation quotation interface – reducing the question set – and using voice, such as Alexa and chatbots.
But CDL is also an expert in data; managing and gleaning information from data that flows through its systems.
Wormleighton added that real time look up of existing data will mean less inputting of information by the user, making the process quicker and easier, but also importantly, resulting in more accurate pricing on a risk basis.
And there is so much more still for CDL to go at. A lot of the technology it is working on has a good fit outside of its core market of insurance and would be useful for lots of sectors and markets.
“A lot of technology companies grow quickly and fizzle out quite quickly. That’s not the case for CDL. We are focused on steady, sustainable growth,” concluded Womleighton.
Victoria Price, partner in the EY Tax practice
The company is now looking at how it can use its big data, along with the technology and tools that it has, to not only make the user experience as easy as possible but also to ensure the premiums quoted are more accurately aligned to risk. In doing so it is making the technology it uses work for its direct clients (the insurers) as well as improving the end user’s experience.
There is clearly a massive opportunity for CDL to roll out its proposition to other sectors and geographies but Andrew and the team are right and sensible to ensure they take a targeted and strategic approach in terms of where they focus their growth plans.
It’s really exciting to hear Andrew talk about the incubator at CDL which gives people time out to take a product or idea from the initial conception through to a prototype in just a few weeks. It’s that fail fast/succeed fast mentality that ensures tech-based businesses really keeping creativity and innovation at their peak.