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Thursday 19 September, 2013

Quindell Portfolio

Telematics and Outsourcing Contract Win with IBAO

RNS Number : 3699O
Quindell Portfolio PLC
19 September 2013
 



Embargoed for release until 7.01 19 September 2013

Quindell Portfolio Plc

("Quindell", "Company" or the "Group") 

 

Telematics and Outsourcing Contract Win with IBAO

 

·     First of several major contracts for telematics expected to be announced by the end of the year

 

·     Contract win value of over C$6m by end of 2014 based on initial target of 30,000 telematics devices

 

·     Telematics device target implies technology revenue over minimum 5 year term of over C$20m

·     Based on 10% to 30% telematics take-up in Canada over next 3 years, revenue potential C$70m to C$210m p.a.

·     Minimum 5-year outsourcing contract to stamp down the cost of claims in Canada provides opportunity to export Quindell outsourcing model to more than double the above revenues via IBAO partnership

 

Quindell Portfolio Plc (AIM: QPP.L), the provider of sector leading expertise in software, consultancy and technology enabled outsourcing in its key markets, being Insurance, Telecommunications and their related sectors is pleased to announce a significant new agreement, subject to final legal terms, for telematics technology and outsourcing with the Insurance Broker Association of Ontario (the "IBAO"), through its wholly owned subsidiary Independent Broker Resources Inc. 

 

Technology contract win

Quindell has agreed a contract with the IBAO's wholly owned subsidiary in which the Group will provide the technology for all the IBAO's telematics initiatives to its membership base representing circa 12,000 brokers who directly or indirectly along with their insurance partners provide approximately 53% of auto insurance policies in Ontario, representing over 6 million policy holders. The contract is on an exclusive basis for a minimum period of five years. Based on an initial target of 30,000 telematics devices, the contract is valued at over C$6 million by the end of 2014, and implies more than C$20 million of technology revenues over the minimum five year exclusive contract term.

 

 

Over the forthcoming three years, the Group's Board, the IBAO and other industry analysts generally believe that between 10% to 30% of all Canadian auto insurance policies will transition to being telematics based, driven by initiatives such as this one being promoted by the IBAO. At a 10% to 30% adoption rate, technology revenue from this contract to Quindell could therefore potentially increase to in the region of C$70m to C$210m per annum over the next three years. All revenues associated with this contract are cash positive and in line with the Group's long term profitability guidance.

 

As a result of the contract, the IBAO's broker members will be able to offer telematics solutions to their customers, providing access to lower-cost insurance, whilst also enabling insurers of all scales to offer a telematics based insurance product, improving choice for consumers and broadening the reach of telematics.

 

Quindell, as a global leader in telematics and both usage and behavioral based insurance, is able to implement all aspects of a telematics program within 8 weeks, including the provision of devices, network connectivity, product platform, systems integration, logistics, mobile applications, data analytics, call centre services, and consumer-facing-interaction.

 

Outsourcing contract win

As part of the agreement, Quindell and the IBAO through its wholly owned subsidiary will partner on an exclusive basis for a minimum period of five years to develop, market and promote a centralised outsourcing platform to provide services for use in the insurance and broker market-place for all policy, claim and related services to leverage the IBAO brand. The contract will be focused on providing excellent customer service whilst stamping down the cost of claims. By taking the opportunity to export Quindell's outsourcing model to Canada this will also have the potential to double revenues from those described above in relation to the technology contract.  Quindell shall invest up to C$5m to support the organic development of its outsourcing model in Canada with the confidence that as facilities are made available, with the support of the IBAO, significant volume will be forthcoming.

 

Warrant Issue to the IBAO

In line with Quindell's strategy to become a central claims hub for the insurance industry to help drive down the total cost of claims and to therefore encourage stake holding by key members of the industry, the IBAO's wholly owned subsidiary will be granted warrants over circa 10 million shares in the capital of Quindell exercisable at £0.175 per share (this equates to a value of C$3 million), or the average trading price in the 30 days prior to the move to full LSE listing if lower.  A further C$2 million of options at £0.175 will be granted by the Company to key personnel who are believed to be instrumental in ensuring achievement of the full potential of the Group's partnership with the IBAO and its subsidiary. The warrants shall be exercisable at any time by the IBAO's wholly owned subsidiary during the next 24 months or until Quindell's AIM listing moves to a full LSE listing, if earlier.  Any profits achieved above the cost of the warrants will be subject to lock in arrangements ranging from 12 to 36 months. 

 

Rob Terry, Founder and Executive Chairman of Quindell said: "The Insurance Brokers Association of Ontario provides an exceptional service to its members and is uniquely positioned to influence change within the Canadian insurance market. We are thrilled to be able to make such a significant contribution to the development of the Canadian insurance market place and are looking forward to driving growth both directly and with ingenie in Canada whilst benefiting the industry as a whole by lowering the cost of claims and improving driver behaviour. This agreement is one of several major contracts for telematics we expect to be announcing by the end of this year, and provides the Board with significant confidence in Quindell's future profitable growth. We have already delivered considerable growth in the UK and look forward to replicating this, primarily organically, in the Canadian insurance market."

 

Randy Carroll, Chief Executive of IBAO said: "This represents a monumental step for the association that will change the shape of our industry. We are excited to offer a solution that is customer focussed and broker driven that will strengthen the broker network and will provide access to telematics technology to all insurance companies. We selected Quindell because they have a proven and enviable track record in the promotion of road safety, the provision of telematics technology and their ability to reduce the costs of claims. We look forward to leveraging their capability for the benefits of consumers, our brokers and the insurance supply chain as a whole."

 

For further information:

 

Quindell Portfolio Plc
Rob Terry, Founder and Executive Chairman

 

Laurence Moorse, Group Finance Director

 

Ian Farrelly, Group General Counsel & Company Secretary

                      Head of Investor Relations


Tel: 01489 864201

[email protected]

Tel: 01489 864205

[email protected]

Tel: 01489 864217

[email protected]

 

Cenkos Securities plc
Joint Broker and Nominated Advisor
Stephen Keys / Adrian Hargrave (Corporate Finance)

 

Canaccord Genuity Limited

Joint Broker and Financial Advisor

Simon Bridges

Bruce Garrow

 

 

Tel: 020 7397 8900

 

                  

 

Tel: 020 7523 8350

 

 

 

Media Enquiries
Redleaf Polhill Limited

Rebecca Sanders-Hewett

Jenny Bahr 

 



Tel: 020 7382 4730

[email protected]

 

 

Notes to Editors:

 

About Quindell Portfolio Plc

Quindell Portfolio Plc is a provider of sector leading expertise in Software, Consulting and Technology Enabled Outsourcing in its key markets being Insurance, Telecommunications and their Related Sectors.  Quindell enters the second half of 2013 with a run rate of gross sales of more than £350 million and with approaching £50 million of EBITDA earned in the first half of 2013. Our award winning Business Transformational, Software, Consulting and Outsourcing Solutions are recognised as delivering significant savings and additional sales to our customers every year.

 

For further information, please visit www.quindell.com


This information is provided by RNS
The company news service from the London Stock Exchange
 
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