Derek Coles: now is a great time to expand in home and protection market
Ryan Direct Group (RDG) has bought home insurance and mortgage protection broker Assurant Intermediary.
The deal gives RDG an extra £20m of gross written premium and 55,000 policies distributed by IFAs and mortgage brokers. Of the £20m premium, around £13m is from home insurance and £7m for protection products.
RDG chief executive Derek Coles said the resurgent property market made it “great time to expand in a growing market” for associated insurance products.
“It gives us scale in a sector that we think is emerging. It’s a key distribution channel with higher than average premiums, at a time when economy is improving,” he said.
Coles said there was a “massive gap” in the UK market for protection products, after sales fell in the wake of the PPI mis-selling scandal. “And ironically the people that need it most are the people that can’t get it,” he said.
Combined with its Uinsure partnership – which distributes home and protection policies through the same channels – the Assurant acquisition means RDG is now as big as market leader Paymentshield, Coles said.
Capacity for Assurant Intermediary’s protection policies will continue to be provided by its former owner, insurer Assurant Group. But RDG will consider whether to change capacity providers for the home insurance policies.
RDG now places £35m of home policy premiums and writes 135,000 policies across Uinsure, Assurant and the Fortress home insurance brand, which offers home insurance products for brokers and affinity partners.
Its major home insurance panel participants are Covéa, Ageas, UK General and RSA.
After completion the company will be renamed and branded RDG Intermediary. Its 36 staff will remain in York and commercial director Vicky Hodgson will continue to run the day-to-day business under the RDI brand as well as joining RDG’s management team.
Assurant Intermediary made a £783,171 loss last year, an improvement on the £1.5m it lost in 2012. Meanwhile, turnover shrank from £10.7m to £7.6m. Assurant said that profitability depended on the allocation of costs between the company and its parent.
The acquisition is the first since Ryan acquired Direct Group in 2012. “It’s important to get the mix of organic growth versus acquisition right,” Coles said. “I don’t see us out there as a buying machine like some other organisations. We look for something that’s adjacent and strategic.”