WTG.L Regulatory News (WTG)

Embargoed for release until 7.00 19 September 2013

Quindell Portfolio Plc

("Quindell" or the "Group") 

Further investment into ingenie for rapid expansion

· ingenie to extend its telematics insurance offering to over 25's in the UK

· ingenie to launch its telematics insurance in Canada

· Quindell extends its investment in ingenie from circa 19% to circa 43%, and in addition acquires direct 40% stakes in the two new ingenie businesses being launched

· Investment is accretive and share consideration gives an implied value of 17.5p per share

Quindell Portfolio Plc (AIM: QPP.L), the provider of sector leading expertise in software, consultancy and technology enabled outsourcing in its key markets, being Insurance, Telecommunications and their related sectors is pleased to announce that it has increased its investment in ingenie Limited ("ingenie" being the ingenie group holding company) to circa 43% and has made a direct 40% investment in two newly formed subsidiaries of ingenie, ingenie (UK) Limited ("ingenie UK"), that will extend ingenie's telematics insurance offering to over 25's across the UK, and ingenie Canada Inc ("ingenie Canada"), that will offer telematics insurance to drivers of all ages across Canada.

The terms of the investment in ingenie were satisfied by the issue of 71,642,850 Quindell shares, increasing the Group's ownership from circa 19% to circa 43%. Based on the agreed valuation of £50 million for ingenie, the transaction gives an implied value of 17.5p per Quindell share.

In addition, Quindell has subscribed for shares representing 40% in each of two newly formed subsidiaries of ingenie satisfied by the payment of £4 million in cash for each. The two newly formed entities, ingenie UK and ingenie Canada, will extend ingenie's existing telematics insurance offering, which has to date been aimed solely at drivers in the UK that are under 25. Now, prospective customers who are over 25 in the UK, and drivers of all ages across Canada will also be able to benefit from ingenie telematics insurance.

The directors of Quindell and ingenie have high confidence that ingenie will continue to achieve rapid and sustainable growth in these two new markets. Prospective partnership discussions have already commenced with major brands in the UK who in combination represent over 25% of UK drivers and a number of core industry participants in the Canadian markets, including the Insurance Brokers Association of Ontario (the "IBAO"), whose members directly or indirectly distribute approximately 60% of insurance in Ontario. These partnerships look set to deliver significant volumes to ingenie within a relatively short time frame from launch.

Quindell's Insurance software solutions were developed for use by ingenie, its charter client, a brand which initially addressed a social and economic issue faced by young drivers: the frequency of crashes involving personal injury resulting in the prohibitive cost of young car driver insurance. ingenie uses telematics technology, developed in partnership with the Williams F1 Team and Cranfield University, to reduce claims costs, whilst pioneering an innovative social media strategy which effectively reduces the traditional high cost of customer acquisition.

Black box insurance is already up to 30% cheaper than traditional insurance and, after one year with ingenie, customers' renewal premiums are on average 50% cheaper than their starting price. Around 70% of customers receive a discount for good driving. ingenie's core focus is improving driving behaviour, so despite these reductions in premiums and quarterly discounts, the company is on target to achieve a loss ratio performance believed to be 30 points better than that for the young age group that ingenie insures.

Quindell worked with the ingenie team for over a year prior to launch in the autumn of 2011. The ingenie team has a substantial pedigree in the insurance industry. Steve Broughton, ingenie's Chairman, is the former Managing Director of RSA, and is currently a Non-Executive Director at Ageas UK and Chairman of Tesco Underwriting. Richard King, ingenie's founder and Chief Executive, is a former co-founder of The Innovation Group plc. The senior team is complemented by Chris McKee, formerly Executive Director of Direct Line and ingenie's Chief Operating Officer. ingenie's insurance policies in the UK are currently underwritten by Ageas and RSA. The original investors in ingenie include the founders of the Williams F1 Team, and Gary Lineker, who is actively involved in the business as ambassador for the brand.

Richard King, Founder and Chief Executive Officer of ingenie said: "I'm delighted that we are able to take the natural next step for ingenie with our partners Quindell. Expanding the brand to over 25's and launching our first international operation in Canada allows us to rapidly grow our community of drivers, who we aim to provide with cheaper insurance while helping them become safer on the road. Since we launched in the UK two years ago, ingenie has achieved fantastic growth as consumers increasingly recognise the benefits of telematics insurance. We look forward to replicating and continuing our success through this further investment from Quindell." 

Rob Terry, Founder and Executive Chairman of Quindell said: "With ingenie significantly profitable already and approaching a run rate of £50 million of gross written premium, all within two years of start-up, it's a natural time to increase Quindell's shareholding. The low cost of customer acquisition that ingenie's digital model offers has always been attractive, but now provides incentive to help this business realise its full potential. We are also thrilled to be increasing our stake as ingenie broadens its business beyond young drivers. Quindell is looking forward to helping the ingenie team drive growth, not least through new potential partnerships in the UK and beyond. We firmly believe that the success we have seen to date in the UK market for both our software and technology enabled outsource solutions has great potential internationally, and these two sets of investments will help us achieve this.

Steve Broughton, Chairman of ingenie said: "This further investment by Quindell will support our rapid expansion into new territories and markets. Our significant growth in the first two years of operation justifies the faith placed in us by our underwriting partners, Ageas and RSA and we are delighted to have their continued support. ingenie has to date been aimed at the young driver, but the application of telematics to insurance applies to drivers of all demographics. We are delighted to be developing our business with Quindell as a key partner as their understanding of the insurance market, technology and capabilities are second to none.

Randy Carroll, Chief Executive of IBAO said: "We are pleased to welcome ingenie to Canada and are excited about the potential of partnering with them. Given the current challenges the industry is facing as it relates to the cost of insurance we are confident that our partnership will go a long way towards lowering rates for consumers. Road safety and education for young drivers is one of the key objectives of our members. ingenie brings a wealth of knowledge and proven capability to help us achieve this goal."

Application has been made for 71,642,850 shares to be admitted to trading on AIM. Admission of the shares is expected to occur on 25 September 2013. Following Admission, Quindell will have 4,227,161,618 ordinary shares in issue. The Company has no ordinary shares held in treasury. The total of 4,227,161,618 ordinary shares may therefore be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

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About Quindell Portfolio Plc

Quindell Portfolio Plc is a provider of sector leading expertise in Software, Consulting and Technology Enabled Outsourcing in its key markets being Insurance, Telecommunications and their Related Sectors. Quindell enters the second half of 2013 with a run rate of gross sales of more than £350 million and with approaching £50 million of EBITDA earned in the first half of 2013. Our award winning Business Transformational, Software, Consulting and Outsourcing Solutions are recognised as delivering significant savings and additional sales to our customers every year.

For further information, please visit www.quindell.com