Swinton will continue its trajectory toward becoming primarily a digital business, Ardonagh CEO David Ross said, but he refused to call time on the high-street broking model.
The broker, which has seen significant downsizing in its branch network in the past two years, was bought by Ardonagh for £165m.
CEO David Ross declined to confirm whether branch closures would continue under the new ownership, but said big changes were in store.
“By the time Swinton gets repackaged and presented to the market in a year’s time it will be unrecognisable from the company it is today,” he said.
Swinton decided in February to close 40 high street branches, affecting 268 jobs. The cuts took the number of Swinton branches from a high of 325 in 2016 to just 59 branches across the country this year.
At the same time, the business invested £35m in a new IT system and £20m on a brand building exercises.
Ross said 95% of Swinton’s current customer base bought their insurance online, and praised the leadership for responding to that trend by investing in the broker’s online presence.
“The transition that the Swinton executive team has managed over the past 12 months has been a difficult path for them,” he said.
“We’re incredibly satisfied with the work they’ve done and they deserve huge credit for navigating a difficult path. When you get into due diligence, you get to see where the trajectory of the business is.”
Deputy CEO Janice Deakin will be responsible for Swinton and all other Ardonagh retail brands, including Carole Nash and Autonet.
She said there were obvious synergies in the online offering of the businesses.
“We’ve got a huge digital business in Autonet. Swinton has also got a huge digital presence,” she said. “Both businesses are on the CDL platform.
“We see a huge online presence where we’re maximising all the brands we’ve got.”
However, Ross said there wouldn’t be any brand rationalisation as a result. “It would make literally no sense to take Carole Nash and change it into Swinton,” he said.
“But there’s nothing wrong with having Carole Nash become part of the Swinton group. We’re excited about how we can stitch this all together. I don’t think Swinton can make Carole Nash any stronger, but Carole Nash can make Swinton stronger.”
Deakin said the success of A-Plan was an example of how the high-street broking model wasn’t dead.
She added: “I don’t think the high-street model is dead, and A-Plan would definitely have an argument against that. You have to concentrate on a business model that works for you, and it has done that beautifully. There’s a lot of admiration for that business in the market.
“But the world has changed when it comes to motor insurance, lots of customers choose to buy online. For me it’s about having the right model that works for customers and about how they want to buy.”
Ross said the brand recognition that came from Swinton’s high-street presence would serve the company well in digital platforms.
“The buying habits have changed but the need for the product has not,” he said. “If you’re sitting there at home with a laptop on your knees watching TV, and you’re looking to buy car or home insurance, your willingness to attach to a brand is still going to be there. That’s where we’re going to be, we’re going to be on the laptop.”
The £165m deal was financed from both borrowing from existing lenders and “cash from monetising certain Swinton assets”, according to an Ardonagh release.
Ross and Deakin declined to outline the plan further and whether it related to the remaining Swinton high-street branches.
However, Deakin said: “We’re not selling any of the core parts of the business. What we are doing is probably a trading deal with a partner on parts of the business and changing the way Swinton works today. Because that’s a confidential deal we can’t give any more information.”
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