THE boss of York credit card insurer CPP has said he and his staff are “on a journey to rebuild the business” as the firm reports operating losses topping £30 million.
In its full year results the Holgate-based business revealed a fall in revenue during 2013 to £178m compared to £269.9m the previous year.
Operating losses of £17.2 million in 2012 became losses of £32.9 million in 2013, while the firm saw renewal rates drop 4.1 per cent to 69.4 per cent with its policy base falling to 7.1 million, two million less than 2012.
Following the end of the financial year, finishing on December 31, 2013, CPP has begun paying compensation to customers affected by a mis-selling scandal, which saw the firm fined a record £10.5 million by the Financial Conduct Authority in November 2012.
A total of £16.5 million has already been paid out, with CPP revealing yesterday that it has set aside an additional £4 million for the redress scheme, bringing the total to £69.8 million.
CPP is subject to a Voluntary Variation of Permissions (VVOP), prohibiting the firm from selling any new policies in UK, while also losing customers who have to cancel their policy as part of the compensation claiming process.
Group chief executive Brent Escott said: “We have to make an application for the VVOP to be lifted and we are working as fast as we can to be in a position to make that request.
“In terms of policy losses through compensation, many of those putting in claims will have already cancelled or allowed their policies to lapse. However, part of the extra £4m we have set aside for the redress is to not only cover the cost of the claims but also the impact of cancellation of live policies.”
Paying tribute to the 550 CPP staff employed in York, Mr Escott added: “It is clear to me that the journey for CPP has been difficult and that the milestones achieved would not have been possible without the hard work of our people. I give great credit to them for their continued dedication to both CPP and our customers.”
“There is more work ahead, nevertheless, the progress made has provided CPP with a more stable platform from which to move forward and build the foundations that will support our future growth.”