Picture Financial boss back in business

NEVILLE ALLPORT is back with a first in the UK financial services sector – a customer- driven model providing choice on income protection insurance.

After more than a year of development, fundraising and securing regulatory approval from the Financial Services Authority, Pure Options has this week gone live.

Its innovative approach provides customers, in a similar way to price comparison sites, with a wide menu of options on income protection insurance, for which many of the UK’s leading insurance companies have signed up.

The current model is for insurers to sell income protection directly to customers.

And unlike comparison sites, Pure Options is also providing the option for customers to talk through products with trained advisers at its call centre.

The irrepressible Mr Allport has built a strong management team, many of whom were with him at Firstplus and later at Picture Financial – the Newport-based secured lender whose growing success was derailed by the ending of funding lines as a result of the credit crunch.

Pure Options has secured financial backing from a quartet of South Wales business executives, who include partner with Gambit Corporate Finance Frank Holmes and former chief executive of Biotrace and now chairman of Finance Wales Ian Johnson – who has been appointed chair of Pure Options.

The investors have taken an 70% equity stake in the business, with the remainder in the hands of the management, of which Mr Allport has the largest interest. The fund raising was overseen by Gambit.

It has also received backing from the Welsh Assembly Government with a £1.5m job creation grant – which will be drawn down in stages as it hits employment targets.

Pure Options, based at St Mellons in Cardiff, currently employs 39 and expects to have 66 by the end of its first year.

Next year it is expected to have reached 121 employees and up to 185 in year five.

As a “trusted intermediary” Pure Options gives customers an array of options on income protection provided by insurers, which include Liverpool Victoria and Alpha Insurance A/S.

In its first year it is forecasting to have generated 47,000 live policies for insurance companies, which in year five is forecast to reach 632,000.

It is targeting the 10.4 million households in the UK without any income protection.

Under its marketing director Neil Patrick, who was part of Mr Allport’s management team at Firstplus and Picture Financial, the start-up has a marketing budget of more than £3m for the first nine months – which could rise to £1m a month in its third year.

Chief executive Mr Allport, 71, said he was delighted to be back in business.

He said: “This really is a once- in-a-lifetime opportunity. We have the trust of the insurance companies as an independent and transparent intermediary.

“It is also the right time for the business with regulatory moves that will separate loans from the selling of protection products.

“We were wonderfully excited when we got the funding in December and at the effectiveness of the website, although we were disappointed in the time taken to get FSA authorisation.”

He added: “At Picture we were looking at where next to take what was an excellent brand, with one of those routes being income protection.”

On the Welsh Assembly Government’s backing, he said: “We are delighted to have their support in creating quality and well- paid jobs in South East Wales.”

On a personal level he added: “I am fit enough and have got to the energy to do it. We’ve also got a great team, We enjoy working with each other and have a kind of shorthand between us that breeds trust, but also ensures that we challenge each other.”

Investor and board member Mr Holmes said: “We have invested in a team which has worked together for 15 years with a serious track- record.

“They have been successful in the past, albeit market conditions went against them at Picture Financial.

“We believe they can do it again. I have never seen a start up before being established so quickly with such military-style precision… it really is a finely tuned orchestra.

Pure Options revenue model is based on a flat fee of 20% of the premium generated for insurers.

As part of its strategy it has the opportunity to provide income protection options directly to other financial firms.

This could see the development of new websites, which could require a new funding round.

Mr Allport said Pure Options could also move into new areas, such as life insurance.

47,000 Live policies plan in year one

632,000 Live policies in year five

185 Employees in year five

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