NAH goes public and outlines major growth ambitions

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30 May 2014


Underdog: strong consumer recognition

Trading in shares in National Accident Helpline (NAH) began on AIM yesterday as it emerged that Minster Law – the major claimant practice – is taking 15% of potential clients the company receives.

NAHL Group Plc floated at 200p and closed up slightly on 202.5p after the first day as a listed company.

The admission document provides significant detail on the operation of the business, which generated revenues of £39.7m in the last calendar year and operating profits of £9.8m.

Last September NAH announced an agreement for Minster Law to become its largest panel member, described in the admission document as a “super panel relationship”. In the last quarter of 2013 Minster received 5% of the enquiries passed through, rising to 15% in the first two months of 2014.

There are around 50 other firms on NAH’s main personal injury and clinical negligence panels; NAH reduced the number from 100 in the wake of implementation of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 in April 2013.

The referral fee ban saw the claims management company replace the fixed-price licensing agreement it had with its panel firms with a new agreement whereby NAH charges “variable margins in addition to the actual marketing and overhead costs incurred, and therefore is able to capture any operational efficiencies”.

In addition, NAH receives a commission from the sale of third-party products – such as after-the-event insurance and medical reports – to the panel firms. The profits from ATE insurance have collapsed in the wake of the LASPO reforms, however.

NAH spent £23m on marketing last year, and it said that, according to Adwatch in February 2014, approximately 40% of people surveyed remembered its TV adverts. “According to research, the Underdog character sympathises with consumers who in NAHL’s experience are often not comfortable contacting a lawyer directly.”

NAH estimates a 1.7% market share for road traffic claims, 12% for other personal injury claims, and 12.7% for clinical negligence, and the admission document said it will be focusing on the latter two as the main areas of potential growth.

It will also look to grow through: enhancing profitability for the panel firms, and by extension itself; potentially moving into accident management services and other “post-settlement support specialisms”; offering further process services to its panel firms, “which could enable them to reduce their costs and focus on high-value legal activity”; and “targeted acquisitions”.

Further, “the group has core skills in selling marketing services, and in particular pooled marketing services, to professional businesses. There is, therefore, the opportunity to expand this core competence by offering such services into other fields of professional activity”.

NAH is already developing a new “enhanced” medical negligence screening service “that is expected to add value to its panel law firms by cutting costs and complexity”.

Russell Atkinson, NAH’s CEO, said the listing “should see National Accident Helpline continue to go from strength to strength”. The admission document said he earns £205,250 and had 340,000 shares as of yesterday (0.83% of the company).

Samantha Porteous, who was chief executive of the wider Consumer Champion Group – which used to comprise NAH and PPI Claimline – has become a non-executive director and has 3.1m shares.

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What are our considerations when looking to buy home or car cover? I would imagine price would certainly be amongst the considerations, but I’m confident that we would each weigh up whether or not our chosen insurer could meet any claims we might bring, and perhaps as importantly, whether they’d provide us with a hassle-free claims process were the worst to happen. Legal expenses insurance should be no different.

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