[1]Rand: more deals in the pipeline
Personal injury firm Proddow Mackay has launched three alternative business structure (ABS) joint ventures in a bid to change strategy following the referral fee ban.
Meanwhile, Vamco, the first accident management company to become an ABS, has signed a deal with a large Essex-based insurance broker to provide an external claims-handling service.
Proddow Mackay, based in Sheffield, has linked up with a claims management firm, an insurer and a broker to mitigate against a drop in cases.
The partnerships are designed to “add volume” to the firm, according to head of legal Matthew Cordall, who joined from Minster Law 12 months ago to help direct the new strategy.
OC Law is a JV with One Call Insurance, Linkfield Claims Service Ltd is a JV with Brian Johnston Insurance and OJM Law is a JV with broker Accident Management and Injury Claims (AMIC).
Mr Cordall said: “The directors have been looking at the JV structure for about 18 months. I came in from Minster Law with a different mindset of how to set a business structure up. We’ve known about the changes from 1 April and knew we needed to change strategy and find the right products.”
Proddow Mackay (PM Law) has had regular meetings with the Solicitors Regulation Authority to ensure its JV proposals were approved. It secured the partners in October last year.
Mr Cordall said they wanted to combine the experience from the three sectors of bringing in the work, while at the same time change the way it promoted itself.
He added: “While claims management companies provided good work, with fees down we need more volume.”
The work will be done by the ABSs, which settle the claims and then the profits are split between the corporate partners from both sides.
Mr Cordall also confirmed that PM Law is now examining what other sectors it could launch further joint ventures in – although wouldn’t be drawn on details. He simply said they were in “advance talks”.
He added: “These structures allow us to diversify. There are further long-term areas we are looking into and potentially variations on the model.”
Vamco – whose – has signed a deal with independent broker firm Saffron Insurance, which has an annual premium income of over £30 million and handles some 2,250 motor claims every year.
David Beswick, managing director of Saffron Insurance, said: “The opportunity allows us to offer our customers a professional and seamless motor claims service with the added benefits of in-house legal expertise.
“The partnership with Vamco has secured a cost-effective solution for Saffron Insurance, enabling us to focus on developing the business and maintaining our high customer retention levels by providing an enhanced claims service.”
Vamco founder and chief executive Tony Rand said more partnerships and affiliation arrangements with insurance brokers were in the pipeline for 2013.
“Saffron has swiftly identified the advantages of outsourcing its motor claims business to us and has seized upon the benefits of our new operational model. The granting of the ABS licence to Kingsley Law has opened up favourable opportunities to work with independent insurance brokers as it maximises their customer satisfaction and client retention, whilst minimising their operational costs.
“By making one telephone call Saffron’s clients benefit from being allocated a dedicated person to handle their claim – not a call centre. They also gain instant access to our services including vehicle repair management, vehicle inspection and damage assessment, recovery of pre-accident value, valuations, replacement vehicles and personal injury claims support.
“Even calls for small claims such as windscreens and misfuelling are handled directly by us, providing a hassle-free service to Saffron.”
Joint ventures are already proliferating as the personal injury market responds to the referral fee ban, with Admiral, Ageas and FMG Group announcing tie-ups with law firms in the past week.