Insurance group’s future "now more certain" after years of crisis

CPP GROUP closed two UK offices and four overseas offices, removed its chief executive, found £20m of cost savings and raised £20m in equity funding in a year of significant challenges – but believes “the future of the Group is now more certain”.

The York-based group, which sells assistance products to customers through business partners and direct to consumers, has had a tumultuous few years that have threatened its existence.

It was badly affected by the mis-selling saga and was fined £10.5m by the Financial Conduct Authority in 2012 and paid out £65.8m in compensation to customers.

In January shareholders backed a £20m fundraising plan after they were told the company would have to close if it was rejected. It also moved from the main list to the Alternative Investment Market.

Chief executive Brent Escott was then unceremoniously dumped last month, after less than two years in the job and just weeks after Eric Anstee became chairman.

Its financial results for 2014 show substantial progress has been made, with pre-tax losses reduced from £43.2m to £7.7m.

These figures were hampered by customer compensation payments and costs related to restructuring, but its underlying operational performance showed a small profit of £500,000, compared with a £1.8m loss in 2013.

“CPP has come a long way in 2014,” said Mr Anstee, who became executive chairman following Mr Escott’s departure.

“The UK Scheme of Arrangement was a significant undertaking and its completion marked the closure of a challenging period in the group’s history. The subsequent restructuring and substantial new investment has set the group on a new path that I believe will bring new opportunities for this business.

“I was appointed to the board at the end of 2014 and, despite the significant challenges that the Group traversed last year, I have been struck by the renewed energy and enthusiasm within the company. CPP has many strengths – longstanding relationships with a broad range of Business Partners around the world, an international footprint and people that have the ability to develop important products that customers like and trust.

“These qualities are the foundations on which we will continue to build CPP’s future in the year ahead. The future will be digital-led and we have recently announced critical investment in a new IT system that will support our ambitions in this area. This is an important first step on a new path for CPP, on which we are focused on taking action to drive improved business performance and maximise value for our shareholders.”