Telematics agenda underlies investment vehicle Tungsten’s intention to spend £2bn on UK motor insurers

The UK motor insurance market got a rare vote of faith today from the news that investment vehicle Tungsten has a £2bn acquisitions warchest that it is eager to spend on car insurers and books of motor business.

The reason Tungsten is so interested in the generally unprofitable sector is that the firm has faith in another area of insurance: telematics.

Tungsten already has a majority stake in telematics black box maker Lysanda, and hopes that it can make money from motor by pushing telematics through any insurer acquisitions it makes.

The firm’s appetite is huge and immediate. It is interested in 53 motor insurers in the UK and Europe, and wants to make its first acquisition in the first quarter of next year. Tungsten co-founder Edmund Truell thinks that many motor firms are keen to sell up.

Major market impact

If Tungsten’s acquisitions go according to plan, this would be one of the biggest consolidations ever seen in the UK motor market.

It would also be a big boost for telematics insurance in the UK, which has been slow to gain a serious share of the car insurance market despite the individual successes of many firms.

A big sudden push into telematics could also see Tungsten benefitting from a large slice of the female drivers market, which many believe could migrate to cheaper telematics-based insurance once the EU gender directive comes into play from December this year and bumps up the cost standard motor policies for women.