Insurance group CPP looks set to lose another major mobile phone insurance contract.
The Royal Bank of Scotland (RBS) has said it is unlikely to renew its mobile phone insurance contract with CPP which expires in March. CPP has been a major player in the UK mobile phone insurance market, administering 2.5 million policies at its height. Losing the RBS contract could see it handling fewer than 500,000 policies.
This will be the second significant mobile phone insurance deal CPP has lost in the past nine months. Last year it lost a mobile phone insurance contract with EE to rival Lifestyle Services Group (LSG), the insurance arm of Phones 4u Group.
CPP has warned shareholders that the loss of both contracts will hit its packaged account business, resulting in significantly lower sales and profit.
The three-year contract for RBS is currently out to tender. Bidders include Ace, Assurant, Assurion, Aviva and LSG. Bidders say competition for the deal is fierce, with concerns that price could win out over quality of service.
Last year CPP was fined £10.5m by the FSA for mis-selling card protection policies. It expects to pay out over £14.5m in compensation to affected customers.
CPP declined to comment.
Author: Carol Millett