Quindell Ups the Ante

PUBLISHED: Apr 07 2014 @ 10:42 | Comments (0) | More info about Lou Gutheil

Just a week ago, 31 March, I reported that Quindell (LSE:QPP) is preparing to join the Main Market and that “The Quindell board sees 2014 as the threshold of massive growth potential.” We’re not able to report as yet precisely when Quindell expects to be listed on the main market (although speculation is mid-June), but we can tell you right now that the company has already crossed the threshold of massive growth by entering into an unprecedented contract with RAC Ltd. Last Monday, the Quindell share price closed just above 36.0 pence per share. Following gains in the latter part of last week, the share price is up 9.6% today to 42.75.

A Huge Deal with Massive Potential

The new deal with RAC is in keeping with Quindell’s self-description as a “Strategic Digital Technology and Outsourcing Partner, re-engineering industries to drive down costs using Ethical practices and Collaborative models.” Quindell has

Invested £30 million to own 51% of a newly-created, jointly-owned company, Connected Car Solutions (CCS).
Plans to invest an additional £70 million as the company reaches predetermined milestones.
Not had to raise any capital to fund the investment

Just how big a deal is it? Let me break it to you gently. It is the single biggest telematic contract Quindell has ever entered into. It is also the single biggest telematic contract ever transacted in all of the UK. In fact, it is the single largest telematic contract in the world.

What’s the Big Deal?

The deal for Quindell is that, through CSS, Quindell will provide driver metrics systems to RAC customers. Those customers who opt to install the electronic safe-driver assessment kit in their vehicles will receive a savings on their insurance just for installing the device. Potential future savings will be available for those who, from the objective metrics, are deemed to be safe drivers. The arrangement appears to be one that benefits not only the companies involved, but their customers as well.

The Quindell metrics will be incorporated into the RAC black boxes used heretofore in vehicles driven by drivers under 25 years of age as a means of lowering their insurance premiums. The boxes monitor speed, location, acceleration rates and engine diagnostics. Once the new product has been rolled out in July 2014, sales of the metrics measurement tool are expected to double. Ultimately, sales of telematic-discounted insurance policies are expected to increase proportionally. After that, availability will expand to include Europe, Canada and, eventually, the world.

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