Risky Business
After selling their insurtech start-up just months after its launch to CPP Group, Paul Prendergast and Peter Bermingham are once again combining their sales savvy and tech know-how to launch a new insurance platform, writes
Businesses that have gone exgrowth or that face declining profits have reason to fret about strategy and what they should do next. At Leeds insurance company CPP Group, the solution is very radical. In the coming years CPP plans to bet the farm on an Irish insurtech product acquired six years ago that currently accounts for under 1% of CPP’s annual turnover.
What makes CPP’s pivot even more remarkable is that CPP acquired Blink five months after the vendor company was incorporated, and then tucked it away and forgot about it. As CPP chief executive Simon Pyper concedes in CPP Group’s 2022 annual report: “Despite being part of CPP Group since 2017, little, if anything, was done to maximise on its potential — it was in many respects an orphaned asset.”
CPP, quoted on the AIM market of the London Stock Exchange, had turnover of £170m in 2022, and ended the year with a net profit of £780,000. Most of the insurer’s activities centre on India (88%), with 9% in the UK and multiple other countries. The latter unit is by far the most profitable in the group, but Pyper and CPP chairman David Morrison see no future in it and classify the activity as ‘Legacy’.
In the CPP annual report, Morrison told shareholders: “We have two successful businesses in India and Turkey, a sub-scale business with considerable potential in Blink, and a legacy business in terminal decline. Over a period of three years, the group will focus on new product and new partner development in India and Turkey, we will seek to build our insurtech capability, with Blink at its
core, whilst we withdraw from the legacy businesses, and the liabilities associated with them. The execution of this plan and the operational risks associated with it are not insignificant.”
Two people who won’t be around for the ride are Paul Prendergast and Peter Bermingham, the Cork insurance entrepreneurs who sold Blink to CPP Group for €1m in March 2017. That deal had an earnout element too, the pair stayed with CPP until 2021, when they jumped out for a new insurtech