Top insurer launches ABS with personal injury law firm
Injury claims: NewLaw was targeting outsourcing joint venture model
One of the country’s largest insurance companies yesterday received its alternative business structure (ABS) licence and has struck a deal with a Cardiff personal injury (PI) firm to provide legal services to customers making non-fault claims.
Ageas, which has around eight million policyholders in the UK, has signed a five-year limited partnership agreement with NewLaw Solicitors, itself one of the very first ABSs.
Ageas Law LLP’s formal address is that of NewLaw, while its head of legal practice is solicitor Adele Jones, part of NewLaw’s management team and the firm’s own compliance officer for legal practice.
Though joint ventures between insurers and law firms have long been predicted, especially in the wake of the decision to ban referral fees in PI cases from 1 April, this is the first to surface. It emerged recently that Lyons Davidson is in talks with Admiral Insurance.
A Belgo-Dutch business that until 2010 was known as Fortis, Ageas recently bought Groupama, and its other UK brands include Tesco Underwriting. Its 2012 UK results recorded an 11% increase in profit to £83m, with income topping £2bn.
AndyWatson, CEO of Ageas UK, said: “The objective of launching Ageas Law is to provide Ageas customers with access to a claims service above market norms. Creating this partnership provides our customers with a one-stop, high-quality journey, with fewer hand-offs to third-party suppliers.”
Philip Dicken, strategic partnerships director at NewLaw Solicitors, added: “The partnership will provide Ageas customers with an integrated claims service, improving the overall customer proposition, at the point when a customer may need to claim for personal injury. At the same time, working together brings an opportunity to improve access to justice, a stated aim of the Legal Services Act, as well as increase consumer confidence in legal services and drive fraudulent and spurious claims from the process.”
Ageas Law LLP is one of the relatively small number of ABSs to have had conditions attached to its licence by the SRA, with the separate business rule clearly uppermost in the regulator’s thinking.
First, the corporate member, Ageas Legal LLP, must not provide, nor be held out to the public as providing, any type of legal services.
Second, in accordance with a waiver granted by the SRA, the connected businesses of Groupama Insurance, Tesco Underwriting and Ageas Insurance “may only continue with the prohibited separate business activities identified at the date of this decision, namely the conduct of third party claims up to, but not including, litigation”.
Third, no third-party claims work can be transferred, referred or outsourced from Ageas Law to any of those three companies nor from those entities to Ageas Law.
Finally, there can be no common branding connecting Ageas Law LLP to the three companies.
In addition to the separate business waiver, the SRA also waived the requirement for managers of specified corporate owners to be approved as managers.
NewLaw was just the fourth ABS licensed by the SRA nearly a year ago and revealed at the time that it was planning to offer a white-label PI service to insurers and brokers. It said it handled 20,000 personal injury claims a year, with some complementary private client services.
This article was rewritten at 3.48pm on Wednesday 3 April after Ageas provided formal confirmation of the arrangement with NewLaw
Tags: ABS, Alternative business structures
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