Consistency will always stand a company in good stead with stakeholders. David Rasche, the serious-minded executive chairman of insurance IT specialist SSP Holdings, has been involved with the business in one way or another for over 15 years.

Appointed as managing director of SSP’s predecessor The Ra Group in 1990, he sold the company on behalf of shareholders to what subsequently became US technology outfit CSC.

In 2001, Rasche and an associate formed SSP and the following year undertook a £20.8 million management buy-in of CSC’s retail insurance broking division. Since then, there have been four acquisitions, all of which, Rasche claims, were successful. ‘We are good at acquiring and integrating companies,’ he says. ‘We won’t overpay.’

Serious double-digit growth

During the past three years, revenues at SSP have risen by 59 per cent to £30.7 million. The company debuted on AIM in October, with the help of broker and adviser KBC Peel Hunt, raising £31 million and gaining a £70 million price tag. The share price has jumped from 98p to 129.50p, pushing the market cap to £92.8 million.

Before the float, various options were considered, such as VC funding, but Rasche evidently relishes life in the hot seat, having established an ambitious three-year plan. ‘The directors want to commit to the company,’ he says. ‘Going to AIM was good for us as we stay involved.

‘There are many plus points to listing, such as being able to see the value of the business on paper and having access to capital.’

Rasche suggests that SSP, as a software company, offers a slightly different business proposition due to its spread of services. ‘Smaller software houses tend to focus on a single product,’ he says.

SSP differs, he claims, by providing IT systems and services to the four sections of the UK general insurance industry: personal lines broking; commercial lines broking; underwriting agencies; and insurance companies. ‘All of the four sectors trade with each other,’ he adds.

Bread and butter profits

The bread and butter for SSP is providing an online service for brokers and intermediaries, allowing them to compare rates and quotes in the market. This operates on a rental and maintenance basis and accounted for 43 per cent of revenue (£13.4 million) for the year to the end of March 2006.

In addition to this, the company provides software solutions and consulting services. ‘What we provide integrates different elements of the industry,’ Rasche says.

Expansion will not necessarily be achieved by attracting more customers, but by gaining a greater share of the market as merger and acquisitions activity within the insurance sector continues apace. Rasche notes that five years ago there were around 7,000 brokers; today that figure is closer to 3,500.

‘As the rest of the market consolidates, we will continue to hold our own market share,’ he insists. ‘We have a third of the market and over 50 per cent of the big players are our clients; these are the ones who are going to consolidate.’

How to spend it?

One of the main decisions now for SSP is how best to use the cash raised from the float. For the initial management buy-in and subsequent acquisitions, a total of £40 million was borrowed. Of this, £10 million has been paid off, along with another £15 million since the float.

The rest of the pot can either be used to pay off the remaining debt of £15 million or it can be used for more deals. Rasche believes further acquisitions are likely to ensure better returns for shareholders.

With a growing demand for IT services from larger insurance players and tighter legislation in the industry, Rasche is predicting revenue to hit the £80 million mark during the next few years.

As for deciding to join AIM at a time when criticism of its value has been mounting, Rasche is unperturbed: ‘We can’t influence the market. We can only think about our share price and ensure that we do well.’ Thus far, everything is going according to plan.