Property & Casualty Services (PCS) will continue to expand its external business, after being bought by Royal & Sunalliance (R&SA) for £3m earlier this week.

However, the purchase will see R&SA cutting its preferred panel of loss adjusters next year.

Under the sale terms, PCS, which had been Independent Insurance's loss adjusting arm, will keep its 300 staff, buildings and cars worth £2.5m, existing business worth £500,000 and its business name. Barry Woodward will remain managing director.

R&SA UK personal lines director Steve Broughton said R&SA bought the business after three weeks in negotiations with PCS and Independent's liquidators PricewaterhouseCoopers (PWC), in a bid to improve its claims handling service.

R&SA already has 800 in-house adjusters and investigators. “In the last few years, we've in-sourced all our personal lines claims and it's worked tremendously well,” Broughton said. “We'd already decided that we'd move in that direction in commercial but it would have taken us two years to build that up so when PCS came up, we were very interested.

“We're very, very satisfied.”

R&SA has GAB Robins, McLarens Toplis, Crawfords and Cunningham Lindsay on its panel, and Broughton said there were no immediate plans to cut it.

He said PCS would be tied up with existing business for the next 12 months, after which R&SA would reduce the size of its panel.

However, Woodward said R&SA was also keen for PCS to grow as much as possible through external business.

PCS had previously carried out 80% Independent work and 20% external work and Woodward said it had always been Independent's aim to sell the business when the ratio was 50%.

Instead, he said R&SA would keep PCS for the long term and was more likely to appeal to its existing customers.

“We've got some existing companies which have been unsettled, that we need to bring back and reassure,” Woodward said.

“They'll find our association with R&SA more palatable than our association with Independent.”

Woodward said PCS staff were happy to be brought into R&SA through a Transfer of Undertakings (Protection of Employment) (TUPE), which meant they remained on the same employment conditions.

Broughton spent Monday telling PCS staff it was “business as usual” following the sale.

“It (the liquidation of Independent) came as a severe shock and there's been a big hiatus on current claims work because no one was sure they'd be getting paid,” he said.

“Our message is that there's lots of work to be done on Independent stuff, so it's back to work.”