Sunday January 2, 2022 2:30 p.m. GMT
One of Britain’s biggest buying insurance companies has struck a Â£ 400million deal to buy out the group that distributes policies for brands like Marks & Spencer and RAC.
Sky News has learned that Markerstudy has agreed to buy BGL Insurance, which is part of the group behind price comparison platform Comparethemarket as part of its largest acquisition to date.
The transaction is expected to be announced this week.
This will be another milestone for Markerstudy, which two years ago became the UK’s sixth-largest motor insurer with the acquisition of the underwriting business of Co-op Insurance.
The company serves more than 3 million policyholders through a range of insurance products.
The purchase of BGL Insurance will effectively double the size of Markerstudy to nearly 6 million customers, and comes at a time when the city regulator has forced the industry to provide renewals to existing policyholders on terms equivalent to those offered. to new customers.
Responding to a request from Sky News, Kevin Spencer, Managing Director of the Markerstudy Group, said: âAs a leading distributor in the market, the acquisition of BGLi offers us a unique opportunity to accelerate and further increase our growth potential.
“We have enjoyed a long and successful partnership with BGL Group, and this has grown in recent years with BGLi acting as an outsourcing partner for a number of Markerstudy brands.”
Peter Thompson, Managing Director of BGL Insurance, described the deal as “a natural evolution for BGLi and brings together our core digital distribution capabilities with the innovative underwriting capabilities of Markerstudy”.
The price paid by Markerstudy, which is expected to be funded in part by a capital injection from its backer Pollen Street Capital, fell below market expectations when BGL Group appointed bankers from Fenchurch Advisory Partners in the fall.
It is understood that the deal also includes potential additional payments which could bring the final price up to over Â£ 500million.
BGL’s insurance arm distributes policies for partners such as M&S and RAC, and also acts as a personal retail lines platform for other major brands, including Co-op home insurance products. Group and Lloyds Banking Group.
The business also includes wholly owned brands including Beagle Street, Budget Insurance, and Dial Direct.
The bulk of BGL’s profits are made by Comparethemarket, which has become one of Britain’s largest price comparison sites.
The BGL Group is partly owned by the Canada Pension Plan Investment Board, which is one of the largest pension funds in Canada.
The company had previously segregated its price comparison and insurance operations internally, making it easier to implement a sale.
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