The spate of acquisitions in the life insurance market at the turn of the century had more than a passing impact on industry, says Bright Grey director of distribution Andy Peters. As a former sales director at Scottish Provident, Peters and the five other founding directors of Bright Grey, who were also at Scottish Provident, found themselves at a loose end following the acquisition of ScotProv by Abbey National and the six of them decided to set up on their own.
Peters started his working life as a group pension administrator at Guardian Royal Exchange in London in 1979.
“I attended an interview and was told I would be perfect for the industry, which was slightly damning at the time.”
A short stint in sales operation at Crown Life was followed by a move to Legal & General as a broker consultant.
“It was not called broker consultant, then it was called life inspector but it is still the best job I ever had.”
He then moved to Scottish Provident in 1986 as a broker consultant followed and became sales director in 2001 but the acquisition by Abbey National of Scottish Provident meant the end of the line for Peters and the five other founder directors of Bright Grey. “Fundamentally, we got sacked.”
The creation of the new business was not a fast process. “We started the project that become Bright Grey on September 1, 2001 and we actually launched on March 28, 2003, so it was a major project.”
As a division of Scottish Life, which then became Royal London, Bright Grey had financial backing but everything else had to be built from scratch. “We had to build all the infrastructure, systems and staff because Scottish Life did not have a protection offering for us to build on.”
But Peters adds that this was not necessarily a bad thing: “We wanted to create a new brand and a new culture within the industry and all of these things were important to achieving that.”
He recalls the satisfaction of starting a business from scratch. “It was incredible to build it from six of us in a room with mobile phones to launching a business because a lot of people thought we would never do it and it was an incredible achievement to do it within that timescale.”
In a stagnant or, in some cases, shrinking protection sector Bright Grey has seen its market share grow consistently and it is continues to grow. Present value of new business premiums for the first half of this year stand at £90.7m, a 14 per cent increase on £79.3m in the same period last year.
Peters believes that part of the company’s success is due to its lack of association with the big, well established brands. “One of the challenges around a new brand was that consumers would not understand it and IFAs are always very conservative and reluctant to engage with new brands. But as we built it, we did some research which said there was total mistrust of the big brands and so anything that was new, as long as the proposition was good, certainly would not find any barriers in the consumer market.”
There was more of a barrier in the IFA market but that was less to do with brand that habit and Peters also says the decision to compete on quality rather than price has paid dividends.
“We had already identified that if you were going to build a successful business and build decent market share, trying to take on just the price players was not a viable strategy. It was always the intention to be a value player, to offer something different to the IFA market and to consumers.”
Bright Grey has continued to concentrate on trying to offer good quality service. Its range of products is the same as when it launched three years ago, with the menu protection plan offering a combination of life, critical illness and income protection. The firm has also introduced the Helping Hand concept, which provides nursing care to policyholders. as soon as they put in a claim. Earlier this year, this nursing cover was extended to cover policyholders’ immediate family if they become ill.
However, Peters says that much of the new business growth is coming from other providers and it is disappointing that new business is not coming from outside the existing market.
“By and large, we are taking market share from other providers. What we want to do, what everyone needs to do, is to grow the market. Other providers want to come into the market, which is good as it keeps you sharp, and it tells you the business is profitable to be in. But it is disappointing that the market has not grown because there are massive opportunities.”
The growth in the mortgage market is not transferring through to a corresponding growth in the protection market and this is an area where Peters says Bright Grey is aiming with a programme of education for advisers and mortgage brokers to get them to treat protection more as a primary sale rather than as an add-on product.
Bright Grey is also looking at the business protection market as an area for growth and the business is in the process of recruiting and training staff to specialise in this area.
“We are building a best of breed product. I am confident that we are going to make a reasonable impact in 2008.”
Away from the office Peters says he is enjoying the relocation north of the border. Five of the six founding directors were already based in Edinburgh so Peters found himself moving north and he says: “It is first city that I have ever lived and worked in so it feels very much like home now.”
Born: : Farnborough, Hampshire, 1960
Education: Cove Comprehensive School, Farnborough Sixth Form College
Career: 2001 to present: distribution director, Bright Grey; 1986-2001: sales director, Scottish Provident; 1982-1986: broker consultant, Legal and General; 1981-82: broker consultant, Crown Life; 19791981: group pension administrator, Guardian Royal Exchange
Likes: Edinburgh, golf and travel
Dislikes: Long meetings
Drives: BMW 325
Book: High Fidelity by Nick Hornby
Film: Saving Private Ryan
Album: Embrace – This New Day
Career ambition: Bright Grey to be recognised as the leading provider of protection products
Life ambition: to get a hole in one
If I wasn’t doing this I would be… I’d love to say golf professional