It’s been 18 months since CPP Group decided to start selling insurance again in the UK and it’s now ready to see if people are prepared to buy.
CPP demonstrates continued success
The insurer, which was fined £10.5m for mis-selling credit card protection policies in 2012 and forced to pay £73m in compensation, is back in the market after the Financial Conduct Authority lifted restrictions in 2017, with a range of new products for UK customers.
Michael Whitfield, managing director of CPP’s UK new business division, which employs seven people in CPP’s head office in Leeds, said he has spent the last year and a half planning, recruiting his team and building the product range.
The next 12 months will be getting those products to market.
At the moment the UK has got just under half a million customers.
Most of those are legacy customers who are happy to pay for card protection including cash advances, lost key coverage and other add-ons — apparently four in five renew every year.
Speaking to The Yorkshire Post, Mr Whitfield said: “The time is right for disruption and we’re in a really good position to disrupt.”
Technology is at the forefront of CPP’s new business strategy. The company sees major growth potential in mobile-first technology.
Over the last 18 months CPP has invested in a number of technology businesses, including Blink, the digital travel product and innovation firm it bought for an initial consideration of €1m (about £866,000). It also paid £1.2m for a significant minority stake in KYND, a start-up offering cyber security services to small businesses in a bid to strengthen its digital capabilities.
It has also partnered with cybersecurity specialist DeCyber to help sports organisations and leisure businesses detect and manage cyber risks. The products are provided in conjunction with cyber insurance cover through Lloyd’s of London and risk awareness training via CybSafe.
“Blink gives us the ability to put some really state of the art products into place. It gives us a real edge in putting assistance products into the travel market,” said Mr Whitfield.
Mr Whitfield believes UK businesses still aren’t taking cyber security seriously enough because they don’t believe they will be hacked and don’t want to pay for protection.
Small and medium sized businesses are particularly resistant, he said.
“It’s much easier for a cyber hacker to get into a small business than a big company, because they don’t have the sort of protective infrastructure in place that bigger businesses have,” he added.
“On a personal level, I think people just expect to get stuff for free. People in this country don’t tend to think of cyber protections as something they should have to pay for.”
The next 12 months, according to Mr Whitfield, is going to be ‘pretty exciting’ for CPP as it rolls out its new products.
The biggest challenge for the division, he said, will be gaining traction in new markets. “The products themselves are great,” he said. “But CPP in the UK has never sold to SMEs before so we’re going to have to work very hard to get into new markets.”
Mr Whitfield said he believes that CPP has fully recovered from the 2012 mis-selling scandal. “We’ve had a long enough recovery period and now we’re back on the front foot,” he said. “The vibrancy of the team that we have here and the culture we’ve established gives us a really good launch pad to take things forward.”
He added: “We’ve got a very strong regulatory team and we’re heavily focused on providing good outcomes for customers, which is the most important thing. It’s something which is embedded into every aspect of our business.”
CPP Group returned to growth for the first time in five years, boosted by strong growth in international sales, in 2017.
At the end of last year, turnover grew to more than £100m as the company said it made strong progress in international revenues led by rising customer numbers in India and Turkey.
The listed company reported revenue of £110.1m for the year ending 31 December 2018, up 13 per cent from a restated £97m in 2017.
The group, which has moved its head office from York to Leeds, said revenue from ongoing operations rose 27 per cent to £88m. It said that currency depreciation in growth markets, notably India and Turkey, hit its results.
However, pre-tax profit reduced to £300,000 from £3.8m following net exceptional costs of £3.1m and investment costs of £2.5m.
Customer numbers across CPP Group’s 12 countries grew by 50 per cent to 8.2m.