Quindell, the claims outsourcing specialist, has signed the largest ever telematics deal with RAC, just days after announcing a sharp rise in revenue.
The arrangement with RAC will lead to the creation of a new company, Connected Car Solutions, which will distribute Quindell and the RAC’s combined connected car capabilities. 51% of the new company will be owned by Quindell, with RAC owning the remaining 49%. Both companies will pay £15 million towards the new business.
Quindell has also issued £125 million of share warrants to RAC, exercisable at any time over the next two years.
Connected Car Solutions will start selling its telematics deals from July 2014, and will target signing up to 10 million subscribers. Quindell estimates that this could equate to $2.2bn per annum in revenues. Himex and ingenie will work with Connected Car Solutions on the black box technology it will offer customers.
Rob Terry, founder and executive chairman of Quindell said that the deal was further proof that the company was set to "revolutionise the insurance industry" by using innovative technology to reduce the cost of claims while improving customer experience.
Last week, the group reported a 133% revenue increase in 2013, with the claims company taking in over £380 million in sales compared to £163 million in 2012.
Laurence Moorse, group finance director of Quindell said that 2013 was another year of "significant progress" for the company which saw it build through organic growth. Only 11% of revenue came from acquired businesses last year.
In its annual report, Quindell also revealed that it was spending £144m a year on case acquisition. Legal Futures reported that it had asked Quindell how this arrangement fits in with the referral fee ban, but has not received an answer on the matter to date.
The outsourcing claims specialist has also announced the appointment of Tom Blackburn as general manager of its legal costs and drafting operations.
Based at the group's new London premises, Blackburn will manage Quindell's full range of specialist claims services; ranging from road traffic accidents to employer’s liability and public liability.
Blackburn has a a wealth of experience relating to costs, from drafting bills to appeals and CMCs and has worked on the largest cost disputes in the UK, advising an extensive range of companies from banks and hedge funds, to charities and government departments.