S&G possible Quindell deal and impact on telematics business.

All of the talk in the press and on bulletin boards is about Quindell and the interest shown in  Quindell Legal Services (QLS)  by Slater and Gordon.

Many are stating that QLS is Quindell’s   jewel in the crown and any deal would be like selling the crown jewels.

This week an offer is expected from Slater & Gordon and the value of the QLS division will be known.

The real jewel in the crown however is telematics and the potential for growth due to Quindell having first mover advantage.

Telematics is important to the Quindell business for the following reasons

1. Ingenie, part of the Quindell Group provide car insurance using telematics technology. Telematics is the key to Ingenie’s impressive growth. Ingenie customers on average save £750 on their insurance.

This highlights the impact telematics is having on the industry.

2. ABI Research – Telematics insurance expected to increase 81% to 107 million in 2018. Quindell a first adopter in the UK has the opportunity to maximise market share of this emerging market.

3. Connected Car Solutions targeting 10 million subscribers by 2020 (10% of the market). Net connections are expected to increase by c20,000 subscribers per month in 2015 (RNS 2nd Sept 2014).

4. Himex are shaking up the car insurance industry by offering new products such as ‘Automatic Crash Detection technology’. This technology has the ability to record an accident happening See Here.

For detailed information about  telematics See Here.

Quindell if the S&G deal happens will have a business that has at its core an offering based around telematics.

To maximise the potential for the telematics business it would seem logical the Quindell business is focused on America for the following reasons:

a. Market dwarfs the European market. Approximately 37m licences in the UK compared with 240m in America. Potential market  648% larger.

b. Telematics growth worldwide is being led by the US (see PTOLEMUS report).

c. All American cars manufactured after 1995 have an accessible OBD – II port and can ‘plug in’ telematics technology.

d. Growth in telematics business based on 10% take up. Initial pilots have indicated take up of up to 30%. Market is therefore greater than originally anticipated.

Add to this the Tosca, Soros, share option and contract awards (See Here) indicating a significant American connection and it is easy to see  the business is poised to make the most of the American opportunity.

Another indicator of increased interest from the states  is the Quindell Echo blog for the month of  January has so far  received 40%+ more hits from America and Canada than for any month in 2014.

All of the above provides an indication that North America will be playing a significant part in the growth of the Quindell business. It is becoming more likely that a listing in North America could happen.


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