January 20, 2010

Insurance Times feature writers rarely stray far from an overwrought cliché in their frantic struggle to conjure vivid panting life from the dreary old world of insurance.

Thus it was that the paper this week reported that “The tumultuous fortunes of credit hire giant Helphire have rarely strayed far from the headlines over the past year.”

Staff left and profits plunged, IT reports, in Helphire’s “annus horribilus”(sic).

It all went wrong, apparently, when AA/Saga cancelled a longstanding contract accounting for 11% of Helphire’s turnover to set up its own credit hire operation. Further problem’s resulted from the firm’s injudicious choice of head-office portalage. “Revolving doors at senior level accentuated the firm’s ongoing struggles,” IT claims.

“Martin Ward was newly installed as group managing director, while three of the founders of Helphire-owned Cab-Aid – Steve Bilham, Steve Johnson and Dilip Patel – left in the wake of the appointment of new Cab-Aid director Sandra Cox.”

The net effect of all this and the economic downturn was a pre-tax loss of £149m and plans to axe 1,250 staff.

“So where did it go wrong?” IT demands to know. “There is an overall macro-economic impact in that people didn’t drive as much and therefore there was a general lack of accidents,” bemoans Helphire technical director Alan Gilbert.

Plus, Helphire claim, “certain insurers’ weren’t exactly hurrying to settle bills worth hundreds of millions of pounds.

But AXA claims bloke David Williams told Times insurers just got better at “playing the credit hire game.” “A lot of CHOs became fat and bloated,” he said, because insurers were “letting them make easy money and making payments that were not justified.”

Allianz claims man Martin Saunders added “They were not monitoring their hires and cars were becoming more expensive. They couldn’t substantiate the claims they were making, so we ended up in conflict.”

Helphire has been a vigorous litigator over the past year. A landmark ruling in the case of Copley v Lawn upheld non-fault parties’ right to reject insurer’s alternative vehicle offers, thus hampering insurers’ attempts at intervention and strengthening CHO’s hand in clawing back contested costs.

But minor victories like this could not prevent a slide that saw substantial cut-backs in the Helphire empire.
Merging Bristol into Bath, the firm cut its fleet from 21,000 to 16,500 vehicles.

Gilbert claims the firm is not bothered about the whole AA/Saga thing, hinting darkly that “AA/Saga may not find operating a credit hire company quite as easy as they thought.” He told IT that Helphire is “moving towards filling the gap through wins with insurers such as Hastings.”

Litigation, he claims, is not the firm’s sole survival strategy – though IT reports that “towards the end of the year the firm had 27,632 cases, with a value of £47.1m, in the hands of their solicitors.”

We’re getting on much better with insurers these days, Gilbert insists. Insurers are not so sure. “We did go through a period where we thought Helphire were more insurer-friendly,” Groupama claims bloke Neil Joslin told Times. “But to be honest, we haven’t seen that Helphire, above any other kind of organisation, is really trying to fulfil that pledge to try to work closer with insurers.”

The article goes on. But it doesn’t really say anything new and the writer’s entertaining propensity for turning an overblown phrase tails off disappointingly. Bankstone News has officially lost the will to distil. So if you’re hungry for more, you’ll just have to get yourself a subscription to Insurance Times.



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