Kwik-Fit cashes in on new products and a crackdown on fraud

Kwik-Fit Insurance managing director June Lynch yesterday hailed the introduction of new products and a crackdown on fraud for helping to boost profits at the Uddingston-based insurance company.

Accounts filed at Companies House showed that operating profits rose to 14.6 million in 2010 from 13m in 2009 on the back of a 4 per cent rise in turnover to 69.8m.

But the company swung from a pre-tax profit of 10.9m to a loss of 1.4m after writing off 13.3m owed to it in inter- company loans by former parent Kwik Fit Group and a further 1.3m owed to it by the group for a computer system.

The write-offs were triggered when French private equity group PAI Partners sold Kwik-Fit Insurance to Belgian bank Fortis, since renamed Ageas, for 215m in July. PAI went on to sell the rest of car servicing group Kwik Fit to Japanese conglomerate Itochu in March for 637m.

Sir Tom Farmer founded the chain in Leith in 1971 and went on to sell it to Ford for 1 billion in 1999. Ford later offloaded the group to private equity firm CVC, which in turn sold it to PAI in 2005 for 800m.

Lynch told The Scotsman: "We've listened to what customers wanted and targeted product development in line with that.

"For example, we launched a 'platinum' product to meet customer demand for a more comprehensive car insurance policy. That's been well received within the market by customers, insurers and price comparison."

Lynch said that the company had also managed to reduce its staff turnover to less than 20 per cent per year, which she said was a record for the company and below the industry average.

She said that hanging on to its staff for longer had helped the company to save money in training and recruitment costs.

The accounts showed that the number of workers rose from 813 in 2009 to 843 in 2010, with staff costs rising from 21.8m to 22.8m.