Joint venture will create new company, Connected Car Solutions, to distribute connected car capabilities
Quindell has signed the world’s largest telematics deal in a joint venture with RAC.
The deal will see the creation of a new company, Connected Car Solutions (CCS), to distribute Quindell and RAC’s connected car capabilities.
Initial investment in the joint venture is £30m, with Quindell owning a 51% stake and RAC 49%. There are plans for further investment of £70m as key milestones are hit. Quindell has also issued £125m of share warrants to RAC at 50p per share, exercisable at any time over the next two years.
Quindell has increased its target for telematics subscribers to 10-12 million from four million as a result of the deal, equating to $720m to $2.2bn per annum in revenues.
The deal will include telematics products offered through the connected car from RAC and Ingenie, with all claims being handled by Quindell.
RAC commercial director Kerry Michael said: “RAC has been looking after our members and their needs for more than 115 years. The formation, in association with Quindell, of Connected Car Solutions will enable us to continue delivering groundbreaking solutions. Together, we will continue to improve the customer journey for our members while driving down the cost of claims for the industry as a whole.
“Quindell’s technology and integrated outsourcing offering is outstanding and, we believe, offers our members and commercial partners a best of breed solution that will enhance their driving experience.”
Quindell founder and executive chairman Rob Terry said: “We are delighted to announce this significant new contract with such a distinguished and respected brand as RAC. This agreement once again validates Quindell’s significant market leading model, which we believe will revolutionise the insurance industry, through a combination of innovative technology and integrated supply chain, stamping down the cost of claims while, above all, improving the customer experience for the brands who choose to partner with Quindell.
“This contract demonstrates the value of our complete strategy in connected car, bringing together Quindell’s technologies to enable the proposition, Quindell’s outsourcing to drive down the cost of claims for the industry, the Quindell Himex digital platform to deliver an outstanding customer experience and an engaging environment for RAC members.
“Lastly, we have leveraged the significant expertise and proven track record of Ingenie and RAC in improving road safety, while delivering to our mutual underwriting partners an exceptional loss ratio well below industry norms, reducing the cost of insurance for members that choose to use the RAC score as the basis for future insurance purchases.”