Watchstone ups investment into ingenie despite losses

Investment is continuing into ingenie, as the man running the telematics broker quashed any talk of an imminent sale.

Insurance Times last month reported that Watchstone, formerly Quindell, was dragged into a loss in its first half results by ingenie, the group’s sole remaining general insurance business.

Watchstone chairman Richard Rose had in April said the group were on track for “preparing its businesses for future disposal” - ingenie and its Canadian healthcare operation.

But ingenie chief executive Selim Cavanagh said the investment being put into the in the business’s future showed a sale was not imminent.

“Strategically, we are putting a lot of investment into a big market that has a lot of potential,” he said.

“If you look at our shareholders, they’re interested in investing in us, and they’re doing that right now. We get a lot of money from them in return for growth and for getting the platform working.”

Watchstone was created to oversee the unwinding of the former Quindell group, and Cavanagh said ingenie could eventually be sold. But he said ingenie had an exciting future ahead.

He added: “If the shareholders intended to sell us now, they wouldn’t be investing in the platform, which they are. 

“So they must see a really exciting future for ingenie worth the investment that will take them through to whatever Watchstone ends up as.”

Watchstone chief executive Stefan Borson backed up this assessment by Cavanagh, saying he was positive about ingenie’s future and that it had no immediate plans to sell.

Borson said: “ingenie’s team, brand and technology positions it well for substantial value growth and the group remains confident of its long term prospects.”

B2B offering

Ingenie formed eight years ago as a retail business and specialises in black box telematics solutions for young drivers.  

For five years the broker has grown through its driver behaviour unit, offering driving advice to customers based on the telematics findings. It currently has around 40,000 retail customers.

But since his appointment last December, Cavanagh has been leading ingenie in a new direction.

After piloting a B2B offering with Dutch insurer ANWB for the last 18 months, ingenie will launch a platform allowing insurers to deploy multi-cohort customer approaches to telematics by the end of this year.

John Law was recently hired to lead growth and strategy in the B2B operation, and Cavanagh revealed he was hopeful of signing up at least one major UK insurer to the telematics platform before the end of the year.

Law is the former managing director of Trackmate, which provided black boxes for Direct Line, and Cavanagh praised him for his knowledge of the market.

And Cavanagh added: “Hopefully he will win more deals and more customers and position us for that B2B market.

“We’ve created a reference customer in ANWB to prove that the platform can work outside of ingenie retail and now we’re in a position to go out and push it.”

The B2B offering will sit alongside the ingenie retail side of the business, and Cavanagh believes both sides can work in tandem to help each other.

Acquisition pot

But Cavanagh revealed he is also hoping to grow ingenie through acquisitions.

ingenie has never completed an acquisition under its own name, but Cavanagh said the funds were there if the right target was identified.

He added: “One of my jobs is to look out to market and find either interesting technology that is complimentary to what we’re doing, or brokers that have access to new markets that we’d be interested in, or have capability we may not currently have. 

“That might be start-up brokers, or more established brokers. We have money, so we can go and buy other people. We can do it if we want to and we’re having a good look at the market.”

Looking into the next two years, Cavanagh says ingenie will launch four new products all based around increased mobility for drivers.

Mobility

He says this is the direction the telematics industry is moving in, and that by the end of this year a pricing model built around mileage and behaviour will be launched by ingenie.

He added: “There’s a big philosophical question in the market. It all comes down to the question of pay how you drive versus pay how much you drive. 

“There are arguments as to which is the better model, but we believe it is a combination of both. Both are factors in your risk profile.

“If you can put together the two in an effective way, that’s the best way to underwrite the risk.”

The plan is for ingenie retail to ultimately become a mobility brand for younger drivers.

And part of this also includes the use of a phone app as a sensor to record driving data. After two years in production and testing for comparison against the black box, ingenie hope to launch this app as a sensor by the end of the year.

He said: “You can see that the market is evolving to help people be mobile. That could be driving your own car, driving someone else’s car, driving for short periods when you’re back from uni for the holidays. 

“It’s a much more flexible approach. We want to create a one-stop shop for all that information.”