Direct Line secures ABS licence as rival insurer wins major contract for legal services arm

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31 January 2014


Motor claims: Towergate has 200,000 customers

Direct Line’s new alternative business structure is set to launch on 3 March after receiving its alternative business structure (ABS) licence, the insurer announced today.

Meanwhile, BGL Group – the – has today announced a major client win to fuel its legal services business.

Direct Line told the stock exchange this morning that subsidiary DLG Legal Services “will extend the range of legal services Direct Line Group already offers its customers”.

Though wholly owned by Direct Line, the ABS is partnering with Parabis. As well as personal injury work, the new law firm will handle non-injury work, including debt recovery, employment and contract issues.

Announcing the arrangement last July, Direct Line said the legal business is not expected to make a “material contribution” to the group’s profits.

Direct Line has nearly 20% of both the motor and home insurance markets. It already provides customers of its own Direct Line, Churchill, Privilege and other brands with some legal services in-house and through outsourcing agreements with a panel of law firms, and last year Churchill advertised the benefits of its legal helpline.

BGL has signed a five-year agreement with insurance intermediary Towergate to manage motor claims for the 200,000 customers of Towergate’s broker distribution network.

BGL’s legal services business comprises York-based Minster Law, which is an ABS, and claims management company ACM, and this capability has allowed it to extend the insurance relationship it already has with Towergate.

David Downie, group director of legal services for BGL Group, said: “Insurers and brokers today are increasingly seeking to offer exceptional end-to-end claims services, at what can often be a difficult time for the customer.

“BGL Legal Services is pleased to be able to provide a fully compliant and customer-centric commercial model in a post-LASPO world. We will continue to work closely with Towergate to ensure the new model is a success across its 100-strong branch network.”

John Kennedy, finance director of Towergate Insurance Brokers, added: “We already work with the BGL Group in an insurer capacity, sitting on the panel of a number of its brands, so we are pleased to extend our relationship even further.

“This new agreement sees BGL centralise claims customer handling on Towergate’s behalf, to ensure a consistent and enhanced experience for policyholders when they first make contact to report an incident and as their claim progresses. Our focus is to provide the best possible service to our customers and with BGL’s extensive supplier network and legal expertise, we are confident that they will be well looked after.”

Last year BGL won contracts with National Accident Helpline and A-Plan Insurance

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