Junction has won a five year-contract to continue brokering the underwriting panel for RAC.
The BGL group subsidiary would not go into details over whether it had clauses in the contract that guarantees its position in the event of a new owner for RAC.
RAC is currently at the centre of bidding war between three private-equity firms following Aviva’s decision to give the green light for a sale, as revealed by Insurance Times earlier this year.
Insurance Times understands that the new owners of RAC will continue with the broker-panel model and it seems unlikely they would force Junction out, even if that was an option legally.
RAC’s insurance arm was originally a broker panel and then Aviva took on sole underwriting of the business, before it was finally reverted back to a panel system in 2009. The business is gradually improving, sales doubled last year and profitability is at break-even point.
RAC will continue with the aggregators, although the new owner is likely to push for RAC to earn more money from lucrative claims referral fees, something Aviva is believed to have shied away from.
A Junction spokesman said: “Junction is pleased to confirm that a new five-year contract with RAC has been signed to continue providing motor insurance products and services to new and existing customers. Junction is unable to comment on the specific terms of the contract.”
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