High net worth motor MGA will use Capita’s outsourcing services
Capita has bought a minority stake in managing general agent (MGA) Infinity Agency.
Under the terms of the deal, Infinity has entered into a long-term contract to use Capita’s business outsourcing services.
Infinity specialises in high net worth car insurance and writes with capacity from Markerstudy.
The deal is the second investment by Capita Insurance Services, a division of the outsourcing giant established by former Clydesdale Bank corporate and structured finance director John Holm.
In May it invested in Sharia-compliant Cobalt Underwriting Agency.
Holm is aiming to build a portfolio of minority stakes in start-up MGAs.
Capita stands to benefit from a steady income stream from its business processes arm, and make a solid return if the MGA is eventually sold.
Successful MGAs can sell for as much as the premium they write, Holm said.
“There is significant activity in the MGA market and our strategy of investing in specialist, high quality businesses with experienced management teams and providing advice and business process outsourcing to them is proving attractive. Infinity fits this criteria very well and I look forward to seeing them grow their business during the course of 2014,” he said.
Holm said he expected to sign more deals this year.
Infinity Agency managing director Michael Ward said: “We are extremely proud to announce this partnership with Capita. It immediately enhances our proposition and accelerates our ambitions for growth.
“With Capita’s support and infrastructure we are now ideally positioned to take full advantage of the many opportunities that this specialist area of the motor market presents in 2014 and beyond.”
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