It has just been announced that Co-op has agreed to sell its insurance under-writing business to Markerstudy, subject to approval from the Regulators. It is important to make it clear that this is not the Co-op exiting from the insurance business – which will remain an important part of our offer. We are just selling the under-writing element, which creates risk and volatility of earnings. Co-op home, motor, travel and pets insurance products will continue to be available – and as well as releasing capital, this move should free us up to develop an even wider range of insurance products to offer to our customers and members. This deal secures the jobs of hundreds of our colleagues – who will continue to be at the “front end” handling customer queries and claims and maintaining the high quality of service for which Co-op insurance is renowned.
From my perspective this is the right way forward. Insurance under-writing was a discrete part of our business and was not operating at an effective scale. Being a regulated business it created a lot of complexity, and the Co-op Group was not the sort of partner that the Regulators felt comfortable with. In Markerstudy we have found a partner with a strong reputation for treating its staff and customers well, and with a higher level of technological expertise than we have historically had in place. We look forward to working closely with them on Home and Motor products for the foreseeable future (at least 13 years), will also work with Markerstudy and others on developing a wider range of insurance products that more closely match our members’ needs. Our recent award-winning travel insurance product has demonstrated how we can innovate in the sector – and we should expect to see a lot more of this in the years ahead.