RAC sets up own broker to help hit £300m GWP target


RAC has launched its own in-house insurance intermediary as part of a package of measures to hit targets of £300m of gross written premium and one million customers in 2023.

“To get effectively a whole broker built from scratch in just nine months is a huge achievement for the team,” head of RAC Insurance Marcus Latchford told Post. “We are looking forward to seeing all the fruits of all the labour now.”

Until now RAC Insurance has worked exclusively as an outsourced operation with brand license type deals across motor, home, van insurance and more. Through these sales and marketing were controlled inhouse with others responsible for pricing, relationships with insurers, IT systems and contact centres.

“We want to start taking more control of the parts of the value chain that we previously outsourced,” Latchford explained.

“The parts where we think we can drive a material improvement in performance, particularly around the pricing, taking over the direct relationship with the insurers so we can use our data assets and our insight to work with the insurers to improve risk selection and ultimately improve pricing.”

It has already built up £200m of GWP in its core motor market proposition in partnership with BGL. The relationship, which has been running since 2008, was renewed in March for a further three years but with RAC taking control of more activities.

RAC spent two and half years developing its inhouse pricing data analytics capability working closely with BGL to deploy that into car, according to Latchford,

“This is the next step in taking full control of the value chain for some of our other products,” he said.

Adding: “We can deploy some of the data and insights from our wider group into these products. Looking at customers that we have got an existing relationship with whether it be with a car or a van and looking at how we can cross sell them more insurance cover is a priority. There is also a mass market element to this. Motor insurance, telematics space, young and/or new drivers is really our heartland.”


The company launched its first product as an intermediary last month with RAC Telematics Car Insurance, in association with Wrisk, going live on 30 March.

It has committed to adding van and home this quarter.

RAC stopped placing van business at the end of December having previously worked with an outsourcing partner and currently works with BGL’s Budget Insurance Services (BISL) to arrange and administer home policies.

Latchford confirmed there were no plans to follow the AA in also setting up an in-house underwriter. The AA’s underwriting arm opened for business in February 2016.

“We don’t take any underwriting risk ourselves nor have we any desire to do so,” he commented.

There is also no change to relationships with the likes of Hood Group, which delivers the travel insurance proposition, and Dayinsure, which handles temporary car insurance.

The broker will continue to work with a panel approach on the lines it is picking up.

Through RAC Financial Services the company was already authorised by the Financial Conduct Authority but had “nothing else within the business that would allow us to trade and service customers”, Latchford detailed.

It has invested in developing tobas, IT, a policy admin platform, a new digital customer journey, setting up the contact centre, new documentation and adding credit providers, he listed.

“Everything you would basically see in a broker we have had to build from scratch in the last nine months,” he said.


Europa Group is providing policy administration services and the RAC branded contact centre and has been recruiting and training staff since the turn of the year, Latchford confirmed.

And CDL has been chosen as the software partner.

“We were really impressed by the Strata system and the digital capabilities they [CDL] were able to offer,” said Latchford.

“They have strong experience in the aggregator led personal lines space and the big players in the market use them,” he continued pointing out that insurers would go to CDL as their “first port of call” to update products and ratings.

Just as there are no plans for an in-house underwriter the new broker is also going to stick to its plans for its core markets of motor, van and home.

“The focus at the moment is on working this investment work,” the RAC Insurance leader stated.

“We see more than enough opportunity in these three markets to get some significant growth into the business. We may decide to venture out more broadly in the future but right now the focus is on those product lines.”

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