Jack Briggs tells Owain Thomas why Simplyhealth seized the opportunity to purchase Groupama Healthcare and what this will mean for the new enlarged provider's philosophy towards the broker market.
When Simplyhealth was formed in its current guise two years ago it brought together five health insurance providers (HSA, BCWA, LHF, HealthSure and Totally Active) into one.
With the agreement to purchase Groupama Healthcare from its parent company signed two days ago it appears the business' ambitions of market growth through merger and acquisition remains alive and kicking.
Jack Briggs, intermediary sales and marketing director at Simplyhealth, explained some of the reasons behind the move and that this was an opening that was too good to refuse.
"These sorts of opportunities don't come up very often and when it did it seemed a great way to add some scale to our business," he said.
"We're trying to add to our business as fast as we possibly can and this gives us another almost 88,000 customers to add to our SME book, which gives us a greater presence in a market that's always been quite important to us. From Groupama's perspective there's nothing essentially wrong with this business.
"They just felt with the motor and household markets as they are they wanted to concentrate on those core markets rather than healthcare where, although they were doing well, I think profitability was difficult for them largely because of business size," he added.
Two into one
The deal is likely to take between two to four months to be validated by the regulators and courts, until which time both businesses will continue to run as separate entities under their present management.
Briggs realises that many people will be wondering what will happen to the Groupama business once it comes under the Simplyhealth banner, but said an integration team was being formed and no decisions had yet been made.
"If and when it concludes in a couple of months time we will have control of the business, the Groupama name will disappear, as it has to, and it will effectively become Simplyhealth."
"In the interim we're appointing an integration team and that will answer a lot of questions about what we do with this and how we will structure the business moving forward?
"The value in this business is in its customer base and employees. That's effectively what we've bought so we want to learn as much about that as we can before we answer questions about how we align or integrate," Briggs added.
He also stressed there was no fixed time frame on the process but did not expect it to be done quickly.
The sale of Groupama has left many brokers concerned about the state of the market and what will happen to one of the most vocal proponents of SME claims transparency.
Groupama has been one of the most outspoken insurers and frequently raised the issue of claims data transparency for SME business at renewal, something many intermediaries and representative bodies have been calling on the rest of the market to adopt.
However, while Briggs appreciates the importance of the issue to brokers, he is a little more pragmatic on the complexities involved and is unlikely to take such a high profile stance.
"We're sympathetic to where Groupama is but I'm not going to be out on the campaign for claims transparency in the way they were," he said.
"Its appropriate for them and their heritage and background but Simplyhealth is not quite in the same space. I don't mind sharing claims experience as long as it becomes market norm.
"And it's not fair to say I'm ambivalent one way or the other. I want to work with intermediaries and clearly where claims experience is a big part of the pricing decision its import they understand where the insurer is coming from.
"But I believe you can do that in ways that are slightly different from the way Groupama did, where effectively they were fully open and transparent.
"They were trying to change a market practice which is very difficult when you're the seventh or eighth biggest insurer. I think that kind of thing can only be achieved by the market leaders," he added.
As for the shrinking provider base in the market, Briggs understands adviser fears but also has a word of warning for intermediaries complaining about it, effectively telling them to put up or shut up.
"I think one of the frustrations Groupama had was that despite doing everything in its power to put something in the market that was worthwhile and different, not enough people voted for it," he said.
"If you value something you do have to vote for it, because if you don't vote for it don't be surprised if its not there - Simplyhealth or Groupama can't be the nicest insurer that you don't do business with.
"If you're genuinely worried about the lack of choice in our marketplace please continue to support organisations that offer something different and if you don't do that, if you place all your business with the same suspects, don't be surprised if that choice isn't there," he added.
Despite the current deal being conducted, Briggs admitted the company was still open to any other possibilities of growth by acquisition, although it is not actively looking.
"In the past it's fair to we've say had a very active mergers and acquisitions strategy - I think this is our eighth acquisition now - so we're experienced, used to it and I like to think we're a safe pair of hands when doing it.
"I wouldn't expect this to be the last one we make, although having said that the strategy is as we were before - we're always interested if something is appropriate but are not actively looking.
"However we do have some expertise in this area and it would be silly of us to throw that away," Briggs added.
And Briggs ended by reassuring intermediaries that, certainly over the next few months, they should not see any differences in service from either provider.
"There should be no changes in behaviour, particularly supporting behaviour for the Groupama proposition, because nothing's going to change quickly over the next three to four months.
"Its deal with the same people who you usually deal with and in many respects I'll be disappointed if advisers notice any change, because there really shouldn't be any as it's the Groupama management who will continue to manage that business," he concluded.
New management team
Parts One, Two & Three
'Flexibility and choice can often reduce the cost of employee health cover'