Paul Sandilands, managing director of Pulse Insurance, is driven by a belief that he can find cover for people who have nowhere else to turn - even if that means operating in a frustratingly slow market. Johanna Gornitzki reports.
A lawyer by training, Paul Sandilands, managing director of Pulse, made the move into the world of insurance when, after getting married and starting a family, he found himself in need of a bigger and fatter pay cheque.
After switching to insurance, Sandilands spent a large part of his career heading up a company called Octavian Life at Lloyd's, which he left in 1995 after it was sold to the US market.
But while the move left him - as a shareholder - with a nice payoff, Sandilands thought it was a shame to leave his Lloyd's contacts behind and that is when the idea of taking over Pulse Insurance first came to light.
"I still wanted to use my contacts in the market and working for a company that would focus on impaired lives seemed like a good niche idea that would fill a need," he says.
True to his words, in 1998 Sandilands and former Octavian colleague David Elliot took over Pulse, a firm that specialises in looking after people who have been unable to find insurance cover elsewhere.
However, it was not an easy ride to start off with. "When we first started I thought I shouldn't have started this. We had seven calls in a month and I thought, 'This is crazy, this is the most stupid idea I have ever had'."
Saying that, 10 years down the line, the firm is going from strength to strength with over 5,000 people contacting it in 2007 for life and travel cover. And apart from Sandilands and his partner, the firm now has seven employees. "We definitely fill a need and there is a demand right now for what we do."
The thinking behind Pulse is that medical science is advancing all the time leading to more and more people surviving illnesses such as cancer, heart problems and HIV and being able to lead long and productive lives. Yet, if they went to one of the mainstream insurers, the chances are that they would not be able to obtain cover. Pulse however, with its contacts in the Lloyd's market, prides itself on finding a way to get most people on the books. In addition, the firm also offers cover for individuals or groups working in politically unstable countries. And it even offers 'confidential life' where the insured is unaware that their life is insured. Sandilands explains: "It has its origin in the music industry where promoters are risking large sums of money to back groups touring the world. To arrange for people to get short-term cover they would have to go for a medical and with a perhaps slightly dodgy lifestyle that may not be a practical solution. So to do things quickly the cover could be placed confidentially - providing a solution for people who have a lot of money at risk."
Deriving cover from several Lloyd's syndicates in the London market as well as from a range of companies including Partnership Assurance, Sandilands says he is driven by the belief that the firm can actually help people. "We are trying to respond and be creative rather than just having a product on the shelf, and while we may not be able to offer all the cover that a client wants we may be able to offer some."
To succeed, Sandilands explains that Pulse needs to work closely with IFAs. He says: "We have to work with the IFA community because our job is not to find the best price but a price. They are the ones who have the difficult task of managing their clients' expectations. What we're trying to say to the IFA is 'let's work together on finding a solution'."
Sandilands says the most difficult thing the firm has to deal with is the issue of affordability - something it tries to surpass if possible.
"Obviously we're not as cheap as the normal market, and a client may say 'thanks for getting me cover but it's actually too expensive'. And when it is too much we have to turn things around and say 'give us your budget and then we can tell you what cover we think you can get'."
Affordability
Sandilands adds that because affordability is a difficult issue, Pulse tries to give any prospective customers an indication of cost as early as possible - usually within a week of them completing a standard questionnaire.
While this may be quick, the time it takes between an individual contacting the firm and them obtaining cover for a high-risk case could be very long and Sandilands blames this for the lack of interest in the market. There are not many companies that specialise in difficult-to-place term life assurance, he says, with the firm really only having one competitor in Risk Placement Services.
"There are not many like us about because no one can stand the pace as it's so slow. It can take three or four months or maybe even longer to place someone so it's a very long drawn out process."
While Sandilands thinks it is a shame the high-risk market is so small, he does not blame the big insurance providers for rejecting difficult cases, but instead believes they should stick to what they are currently doing. "The big operators are used to handling big volumes of business at a very low cost, and that's what they are good at. It is a good thing that they are making life cover as widely and cheaply available as possible and if they skewed their books by taking on a lot of high-risk business they would not necessarily be doing people a lot of favours."
Looking at the protection market overall, Sandilands think aggregators will have quite an effect on the life market. "An aggregator can reach a much larger section of the population and they can do that in a way in which the IFA simply can't as they haven't got the resources," he says.
He warns that it will be very difficult for the industry over the next three to four years, saying the industry has to be innovative to combat these difficult circumstances. "We are an illustration of how you can make the market grow by offering something new," he says, adding that he thinks the high-risk area will grow.
Hoping that Pulse will gradually make an impact, Sandilands says trying to promote the firm among IFAs is its number one plan for the coming year.
"This is what we shall be concentrating on as we want to make sure IFAs know what we are offering. But we will have to take one step at a time as we would need more capital behind us to grow more quickly."
To get Pulse to grow to a significant size has been one of Sandilands biggest challenges, but he stresses that it has been an "enjoyable problem".
"I would be glad to see Pulse really recognised as a force in the industry, but it will take another few years." n
