Insurance BPS player Quindell Portfolio expects to hit current full year revenue expectations for 2013, even before it has announced 2012 results (see Quindell's buoyant FY12 update), after successfully converting 100% of its pilot outsourcing deals announced towards the end of 2012 into ‘full relationships’. Quindell said the final terms of these agreements are now being put in place in the lead up to 1 April 2013, and range from rolling contracts with several months' notice to contracts with a minimum five-year duration and rolling notice thereafter.
These pilots appear to have been pushed through in readiness for the referral fee ban and Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) regulatory changes that come into force on 1 April 2013. Quindell said this is ‘without doubt, one of the leading considerations within the boardrooms of the Group's prospective customers’. And as a result, it is seeing sales cycles continuing to be accelerated.
Unsurprisingly Quindell’s strategy from mid-February 2013 is to focus on higher margin outsourcing work with a targeted EBITDA margin of 25%. It had been doing pure hire or pure repair contracts where EBITDA margins were in some cases as low as 5%.
Quindell is certainly ambitious. It is now engaged in a feasibility exercise to see whether it can move from AIM to Premium Full List as soon as possible. The fact that some big name insurers have now signed up to Quindell’s BPS offering is a clear endorsement of the model. Quindell now has the small matter of delivering.
Subscribers to TechMarketView’s BusinessProcessViews research will be able to read our report looking at the general insurance BPS market drivers and opportunities in the next couple of weeks.