FirstAssist to target claims inflation following £71m Cigna buyout

FirstAssist Insurance Services will use its new relationship with US healthcare giant Cigna to help control claims inflation in travel insurance, said new chief executive Alastair Hardie.

Barclays Private Equity (BPE) sold FirstAssist Insurance Services to Cigna for £71m, subject to FSA approval.

Cigna, a US healthcare provider with an $11bn (£7bn) market capitalisation, will use its global medical network to help FirstAssist control medical expenses, which have been increasing in recent years.

Chief executive of Cigna health, life and accident division globally Jason Sadler said: “Obviously a significant part of travel claims is medical-related - around 66% - so we see some obvious synergies there.

“We’ve got a global medical network of a million hospitals, doctors and practitioners, which we are hoping to leverage in terms of managing claims costs more efficiently, and taking the travel expertise that FirstAssist has in the UK and exporting that to the 13 markets that we operate around the world.”

Barclays owned 90% of FirstAssist Insurance Services, with the rest being held by management. Following the deal, FirstAssist group managing director Martin Totty will step down and his role is replaced by Hardie.

FirstAssist writes around 10% of the UK £700m gross written premium travel insurance market.

Hardie said: “We see the ability to tap into Signa’s global health base, particularly in the USA, where a lot of the claims costs arise. This will give us a real leg up over the competition.

“So as well as being able to take it globally, particularly into Asia Pacific - a first area of growth for Cigna - we think it does give us an advantage in the UK to try to move up from number three.”

BPE bought FirstAssist Group off RSA for £147m in 2003. It has sold off a string of business from the group since then, during which time FirstAssist has paid down debt.

BPE Investment director Andrew Backen said the fund retains FirstAssist ATE and its stake in high street broker A-Plan.

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