CPP’s profits fall as probe continues

CPP, whose products are aimed at victims of identity theft, has been under investigation by the Financial Services Authority since March 2011.

The FSA says CPP may have overstated the risks of identity theft to customers and not properly explained how its products worked.

CPP agreed last month with the FSA to make a number of changes to its renewals process and review its past business, but the company said the matter was not yet fully resolved.

“The agreement with the FSA does not mark the end of the FSA investigation which is continuing,” chief executive Paul Stobart said in a statement.

“In the short-term, 2012 is a very important year for us, particularly in the UK, and my first priority is to work closely and co-operatively with the FSA to resolve matters to the complete satisfaction of the regulator,” he added.

The company also said it was making good progress on improving its business practices and customer relations.

CPP made a provision of £14.8m to cover compensation to customers in light of the FSA’s probe, and this hit the company’s annual results, with 2011 pre-tax profits falling by 29 per cent to £28.3m.

Mr Stobart added: “In a difficult year for the group in which we have been faced with the challenges of the FSA’s investigation into our UK business, CPP has nonetheless delivered a robust financial performance in 2011 with group revenue increasing by six per cent.

“The group has worked very hard to manage the business through this period of uncertainty and we continue to make important improvements to the way we engage with customers.

“Since joining the business in October I have spent a lot of time listening to our stakeholders, and it is clear to me that CPP has many great strengths. The business has a long history of success and, most importantly, of excellent customer service. We are bringing this customer focus to the fore of everything we do, shifting the business culture and operating model to be more overtly customer-centric.”

“Since joining the business in October I have spent a lot of time listening to our stakeholders, and it is clear to me that CPP has many great strengths. The business has a long history of success and, most importantly, of excellent customer service. We are bringing this customer focus to the fore of everything we do, shifting the business culture and operating model to be more overtly customer-centric.

“The longer-term opportunities for CPP remain considerable, and we are well placed to make the most of these. The business has a customer base of 11 million policy holders, strong and often long-standing and exclusive relationships with more than 200 Business Partners worldwide, and a well-established international presence across 16 geographical markets. In the short-term, 2012 is a very important year for us, particularly in the UK, and my first priority is to work closely and co-operatively with the FSA to resolve matters to the complete satisfaction of the regulator.”