Chief exec says technology needs to catch up
UK affinity insurance provider Junction will carry out a full review of the commercial market over 12 months before deciding whether to target SME business.
Peter Thompson, managing director of the company – an arm of BGL Group – last year said the company could move into commercial lines through acquisition.
But Thompson has put plans on hold after deciding that the market had “not developed enough” in the past year. “For now, it is something we are not going to invest in,” he said.
“We had a good look at the SME sector and believe there is an awful lot that is attractive about that sector to Junction.
“But there were two key elements that prevented me from investing at this stage. One is that customer buying habits haven’t changed sufficiently in my opinion for that to hold enough profit potential for us in the short to medium term.
“Secondly, technology just hasn’t quite got there yet, as far as I’m concerned. So at this stage I’m just sitting back and waiting for that market to develop.”
It comes as Thompson ended his year-long hunt for a business development director, by appointing Colin Graham from Barclaycard. Graham was head of corporate development and business strategy for Barclaycard US.
Thompson said the main area of focus for Junction would remain in motor and home insurance, but added that Graham would “assess wider opportunities should he think they are appropriate."
Last month, Junction agreed a five-year contract with Santander to deliver a new online home insurance product.