Tue, 10 Sep 2013 | DIVISION SALE
Outsourcing and insurance firm Capita is set to sell off its underperforming direct-to-customer insurance businesses.
The London-based business is in the process of jettisoning two portions of its operations, to include Lancaster, BDML Connect and Hero. Deloitte has been appointed to sell the businesses, the postonline.co.uk has reported.
Originally an outsourcing provider and seeking to offer a one-stop service for all insurance needs, Capita set about making strategic acquisitions to do so.
It bought BDML Connect in 2005, which enabled it to source quotes from several insurers. The independent intermediary Lancaster was folded into its insurance distribution division in 2008, after a deal worth £16.5 million. Personal lines broker Hero was purchased from LV for £15 million in 2009.
Following the purchases, Capita was hit by several poor results from its insurance division. The firm’s turnover for 2012 of £146.8 million revealed a steep fall from £183.5 million in 2011. Underlying operating profits dropped to £17.7 million from £28.3 million for 2011.
Capita said of its results at the time: “Our general insurance division had a poor year with lower revenue and profit. We have therefore strengthened both the leadership and sales teams to reinvigorate these operations in 2013.”
It acknowledged that times were tough for its general insurance operations looking back at its results for the first six months of 2013, and determined to review the situation going forward.
One industry insider commented: “Capita has given up on insurance. It’s an outsourcing business at heart and it is sticking to its knitting.”
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