Finding affordable insurance for someone with a medical condition or criminal record can seem impossible. Insurance Times talks to the brokers that always try to say ‘yes’

Kevin Waite was a volunteer at London Lighthouse, a support centre for people living with HIV, when he discovered how hard it was for centre users to find insurance.

Despite not coming from an insurance background, he set up the broker firm It’s So Easy Travel Insurance. Three years on and It’s So Easy is going strongly, with its latest product offering life insurance to people with HIV.

Waite says that finding cover for people with challenging personal circumstances can mean working outside mainstream risk assessment. The challenges range from targeting your specific market to finding insurers and dealing with an occasional substantial loss.

His customers might have a serious disability, a medical condition or a criminal record – and can’t find insurance through commoditised products or on aggregator websites. They turn to companies offering niche insurance products, and the benefits can be mutual.

Freespirit is a specialist travel insurance broker for people with pre-existing medical conditions. Demand for its policies has been so great that it has grown ten-fold since 2003.

Another company, Insurable, specialises in insurance for reformed offenders, and was set up by Gothic Insurance four years ago.

So how do these brokers manage to offer affordable premiums and remain profitable when other companies view such customers as risky prospects?

Really know your client

Waite says the key is a deep understanding of the actual risks represented by his customers, coupled with strong relationships with his insurers. “My work with people living with HIV means I understand the risks and can offer highly targeted cover.”

Waite’s insight also means he can address customers’ concerns and talk in detail about clients’ conditions. He says confidentiality is paramount. “We are a small company and we can guarantee that clients’ information will not be passed through a chain of financial institutions.”

Setting up It’s So Easy took determination, however, mainly because of insurers’ perceptions about the risks of covering people with HIV. “Most insurers gave me a categorical ‘no’, or said they could not cover people who had developed Aids,” says Waite. “Insurers don’t always want to deal with conditions they don’t understand.”

Waite met the problem head-on. He wrote a detailed report about HIV that put across the everyday realities faced by people with the condition. Millstream Underwriting responded and now underwrites It’s So Easy’s HIV-specific policies. “I was honest but realistic about the risks,” Waite says.

Meanwhile, broker Fiona Macrae created a travel insurance product for women with breast cancer after suffering the illness herself – and finding how hard it was to get cover.

“I was horrified at the quotes, but no one could tell me why the premiums were so high,” says Macrae. “I knew I would pay more than average, and perhaps 100% more – but not 1,000% more.”

Feeling charitable

Macrae went on to create the Insurepink brand for Equity Insurance Group. Insurepink is now owned by Hastings Direct and has continued to grow.

Insurepink business development director Andrew Kirton says: “As medicine moves on and treatments improve, there is no reason most people should be paying large premiums.” He also highlights the company’s popular support for the Pink Ribbon Foundation, which supports UK breast cancer charities. The company is raising £1,500 a week by giving £10 for every motor or household insurance policy sold, and £1 for every annual travel insurance policy.

Macrae, meanwhile, is now operations director at travel insurance broker, providing cover for people with a wide range of medical conditions. “General travel insurers don’t ask enough questions about people’s medical conditions. With a full investigation, we can more accurately assess the risks.”

The difference for clients is stark, says Macrae. She cites the case of one customer who had secondary cancer. They had been quoted a premium of £1,000 for a trip to the USA, but paid just £280 with Insurancewith.

Insurepink is not the only specialist brokers to benefit from a close relationship with charities. Freespirit, a brand aimed at people with pre-existing medical conditions owned by travel insurance specialists PJ Hayman & Company, works closely with Age UK.

Managing director Peter Hayman says: “People often ask the charity where they can go to get affordable insurance. We get referrals from Age UK because it knows we can deal with an individual’s particular circumstances.”

A similar relationship works for Insurable, which receives referrals from Unlock, the National Association of Reformed Offenders.

Good counteracts the bad

With the after-effects of the recession still being felt, however, is competition in this niche market increasing?

Freespirit says it is, and Hayman states: “There is a danger this will drive down premiums, increasing insurers’ risk – and some competitors are creaming off the less hazardous cases.”

Freespirit’s response is to review its risk assessment models to keep up to date with advances in medicine, and accept that an occasional loss is inevitable. “When you are covering those with cardiac or respiratory problems, the odd seven-figure payout will happen,” says Hayman. “Our longstanding relationship with our insurer Axa is crucial. The good years help to counteract the bad.”

Most specialist insurers, however, say the pros of covering people shunned by more general insurance companies outweigh any cons.

Wayforward director Richard Weston, whose company offers insurance products to ex-offenders, says: “As insurers get bigger and use increasingly sophisticated but more complicated computer systems, they lose the ability to handle individual enquiries efficiently.”

Large companies’ tickbox approach to insurance will never suit certain people – and this has created opportunities for specialist brokers. As It’s So Easy’s Waite says: “We treat our customers individually and truly understand their risk factors. We can offer products that are very much needed, and work from a business perspective.” IT

Five ways to build your brand

1. Spot the opportunities for creating a product or expanding your offering. Insurable began in 2006 after an ex-offender asked Gothic Insurance for help to find cover, while It's So Easy's customers expressed an interest in life assurance products, so director Kevin Waite knew there was a market.

2. Team up with charities. Part of the success of Hastings Direct's Insurepink is its link with breast cancer charities. "It's not just those with cancer who want to support these charities, it is all those whose lives have been affected," says business development director Andrew Kirton. Charities
can also give information on rare or complex medical conditions to help you decide risks.

3. Be competitive for customers outside of your niche. Freespirit says eight out of 10 customers do not have a pre-existing medical condition. Similarly, It's So Easy offers products to people who do not have HIV.

4. A good website is vital. Insurable director Dan Norris says: "People find us mainly through Google searches once they realise that aggregator websites aren't for them."

5. Check out the online directory at the Special Insurance Schemes Agency ( Wayforward director Richard Weston says: "It is brilliant in making it simple to source special schemes and facilities for everything we need."