Looking at Stuart Pender’s career history, one might be forgiven for thinking he was a man in a hurry. He has never stayed in one position for very long – either by moving on up the corporate ladder or by moving company for fresh challenges.
Now, as managing director of insurance supplier Paymentshield, he has spent the last five months building a team to deliver an aggressive strategy for 2005 which he admits would not be possible were it not for the backing of HBOS. That financial backing was achieved during the management buyout of Paymentshield last summer, which Pender was brought on board to lead.
And while it sounds like an unlikely story, the involvement of HBOS in the management buyout of Paymentshield has its roots in a chance meeting at Paddington Station.
Pender claims the lender’s involvement in the buyout developed when he bumped into James Crosby – a former colleague from Scottish Amicable, and now at HBOS – at the station.
That brief encounter helped the management team of Paymentshield acquire the necessary financial backing from HBOS to complete the buyout of founding shareholders Richard Riding and Patricia Cottrell in August 2004. HBOS then took over the underwriting for Paymentshield a month later.
The management buyout of Paymentshield was not the first acquisition with which Pender has been involved. As commercial director for Bankhall he led the acquisition of Premier Mortgage Service (PMS) and Norwich Union Mortgage Club.
However, had someone told Pender 20 years ago that he would one day lead the business strategy for one of the largest insurance distributors in the industry he could probably have been forgiven for not believing them.
For the first 10 years of his career, Pender worked as an actuary for Scottish Amicable, after graduating from Glasgow University.
Fast mover
He progressed through the company quickly and by 1995 moved from assistant finance manager to principal strategic planning consultant and then, in 1997, to strategic planning manager for Scottish Amicable.
Following the acquisition of Scottish Amicable by Prudential, Pender was made corporate planning manager within Prudential UK Intermediaries. He was promoted quickly again and, five years later, became commercial and finance director for the Prudential Group.
In 2002, he joined Bankhall as commercial director and, having led the acquisitions of both PMS and Norwich Union Mortgage Club, turned his attention to Paymentshield.
He readily admits Bankhall had targeted Paymentshield for a potential takeover in order to gain a presence in the general insurance market. However, instead the support services provider and the general insurance distributor formed a strategic alliance, which he says played to the strengths of both organisations.
It was as a result of Bankhall’s interest in Paymentshield, and the relationship that developed between the two companies, that Pender came into contact with the senior management team of the distributor and eventually joined the board to lead the management buyout.
Switching focus
Since August, his main focus has been to add to the senior management team. Vernon Powell, former partner at Deloitte & Touche, has joined the Paymentshield board as director of finance while Eamon Kennedy – formerly at Standard Life Investment – has joined as IT director.
Pender says: “I have spent so much time building up the management team because I wanted to ensure we would be able to deliver our strategy for 2005. Our unique selling point is the simplicity of doing business with Paymentshield. Our technology platform is recognised as market-leading and as we move into other product areas we will be trying to bring that simplicity to those areas. What we need to do is continue to bring new products to the market, but also make sure the technology is user-friendly so advisers spend less time processing business with us and more time with the client.”
Paymentshield’s strategy for 2005 will see it launch new products in the general insurance market, enter the life market with an integrated life and general insurance product and limited life assurance provider panel, launch a mortgage introducer network based on its general insurance introducer model and begin specialist mortgage lending.
Pender says the strategy represents a full agenda for the company and admits much of what Paymentshield is planning to do would not be possible were it not for the backing of HBOS. “Transferring the underwriting to HBOS has enabled us to look at several new areas. Obviously we have been working very closely with HBOS and will be developing products with them. But, most importantly, with HBOS we have continuity of supply around those products,” he says.
The new products Paymentshield intends to launch in the general insurance market include products in new areas, such as legal and home assistance, and landlord and payment protection. In terms of the protection market Paymentshield intends to launch an integrated protection and general insurance product to include life assurance and critical illness cover in June. As for the mortgage market, it will launch its introducer network later this year with the intention of offering services and products for mortgages, secured loans and life business. The final element of the strategy for 2005 will see Paymentshield begin to offer specialist lending.
Pender believes there is significant potential for Paymentshield in this market. “Specialist lending is a huge segment of the market. If you go back five years it was 10% of the mortgage market – it now accounts for 30-35% of the market. Buy to let, sub prime and equity release are all strong growth areas. We believe we can bring real value to these areas in terms of supporting advisers, whether they work predominantly in mortgages and just want some specialist advice or want to hand an application across to another party to fulfil the sale.”
Asked if Paymentshield will launch a full network, he reiterates the original strategy to stay out of compliance support instead of describing Paymentshield’s proposition of providing administrative support for the products it designs and brings to the market. “I do not think it is very likely that we would ever go into the traditional network space. Our role is to develop an increasing range of products and to distribute those products to clients through directly authorised advisers and networks,” he says.
He adds: “There are still a large number of mortgage advisers who are not fully enjoying the benefits of the general insurance sale, but it is easy to add on to the mortgage transaction and, through the introducer model we will be offering, we will be trying to make it even easier to do that.”
Pender is almost bullish about the future prospects of the company, citing its strong brand, its plans for 2005 and the substantial financial backing of HBOS. He says he even has sufficient support from HBOS to consider making acquisitions.
Given that he has led a number of these already, and the speed with which he appears to be able to carry them out, some might consider that statement as fair warning. Whatever the case, Paymentshield has every intention of making significant gains during 2005 and beyond.
