Norwich Union owner Aviva expanded its services beyond insurance yesterday by buying a firm that specialises in combating fraud in second-hand car sales.
It has agreed a £120 million deal with Phoenix Equity Partners to purchase HPI Group Holdings, which provides vehicle status checks for would-be buyers.
HPI investigates whether a vehicle is subject to outstanding finance, is recorded as stolen, or has been written-off by an insurance company.
It also provides data on the current market value of particular models of second-hand cars and uses the National Mileage Register to ensure against "clocking".
Based in Salisbury in Wiltshire, HPI has a 60% share of the market for vehicle status checks.
Its sales grew by 36% to £22.5 million in the two years to March and profits for the current calendar year are expected to be £10 million.
Norwich Union chief executive Patrick Snowball said the deal would enable the group to capture new customers as buying a new car is seen to be the second biggest "trigger point" for people to change insurer.
It would also help Norwich Union to offer people a broader range of services such as checking a car's history, insuring it and offering roadside assistance.
Mr Snowball added: "HPI is fast growing with significant opportunities to expand its own business."
Around 6.8 million used cars changed hands last year, but industry data shows only 60% of these were checked.
A key area for expansion will be private deals as only 5% take place following a thorough investigation of a car's history, Aviva said.
Aviva is the world's fifth largest insurance group and made profits of £1.91 billion last year.
Tuesday August 17, 2004
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