Nov 6, 2020

Nordic Capital acquires BearingPoint’s RegTech

Acquisition
Regtech
BearingPoint
Nordic Capital
Rhys Thomas
2 min
Senior management team will remain with RegTech under new owner, with Bearing retaining minority stake
Senior management team will remain with RegTech under new owner, with Bearing retaining minority stake...

Private equity firm Nordic Capital is to acquire RegTech, the regulatory technology arm of BearingPoint, for an undisclosed amount.

BearingPoint will act as a strategic consulting partner and retain a minority stake in RegTech, which serves more than 6000 reporting firms, including banks, insurance, and financial services entities.

Founded more than 25 years ago, RegTech is headquartered in Frankfurt and, operating from 17 offices in 10 countries, is a market leader in the DACH region (Germany, Austria and Switzerland). The company’s solutions increase efficiency and accuracy in vital regulatory and tax reporting, risk and data management, ensuring compliance with rapidly evolving regulatory requirements. 

RegTech at a glance:

  • 17 offices across 10 countries
  • 630 employees 
  • Expected to generate revenues close to €100m in 2020
  • 6,000+ banks, insurance and finserv firms served

RegTech CEO Jürgen Lux will continue on in the role, alongside the rest of the management team, to work in close partnership with the new owner, which intends to invest in continued expansion plans. Groundwork to establish RegTech as its own independent firm within BearingPoint began two years ago, Lux revealed. 

“Together with Nordic Capital, we have formed an ambitious growth agenda and will continue to invest in our proven, reliable and forward-looking software solution suite,” says Lux, who revealed the groundwork to establish RegTech as its own independent firm within BearingPoint began two years ago. 

Fredrik Näslund, Partner and Head of Technology & Payments, Nordic Capital Advisors, says: “We are very impressed by the company’s market position, its platform and its potential for further expansion. Our broad experience supporting the growth and development of software and technology companies makes Nordic Capital an ideal partner to play a formative role in the next phase for RegTech together with the Company’s management team.”

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May 28, 2021

FCA bans ‘price walking’ for insurers from Jan 2022

FCA
pricewalking
insurers
Insurtech
3 min
The City regulator has said insurers must not raise prices at renewal and penalise loyal customers

Insurers will no longer be allowed to raise premiums upon annual customer renewals following a new ruling by the Financial Conduct Authority (FCA)

The new move, which comes into effect in January 2022, will directly affect people renewing their home or motor insurance because they will pay no more for their premiums than a new customer. 

The FCA said the change will save loyal customers an estimated £4.2bn over a 10-year-period. However, it also admitted the move could mean cheaper deals for new customers can no longer be sustainable for insurers attempting to attract business. 

Price walking practices ended

According to reports, the FCA has been working on changing the rules on ‘price walking’ as it is termed, because customers are charged more their annual premiums, even though their level of risk remains the same. The system has resulted in complaints from consumer groups that loyal customers pay more unnecessarily.

Speaking about the regulatory change, Sheldon Mills, from the FCA told the BBC

"These measures will put an end to the very high prices paid by many loyal customers. Consumers can still benefit from shopping around or negotiating with their current provider, but won't be charged more at renewal just for being an existing customer."

Victory for the customer

Consumer groups have hailed the change as a victory for customers who have ended up paying higher premiums unnecessarily, but admitted it presented huge implications for insurers in the short term.

Consumer Intelligence CEO, Ian Hughes said, “These changes represent a tsunami for both insurers and their customers, but we should be in no doubt that the fault line that sits underneath this is fair value, mentioned 153 times in the final statement. GIPP changes will feel like just a ripple for those who don’t offer fair value to customers."

He continued, “This is going to be a bumpy ride for insurance brands and consumers alike in the short term. Today, the FCA has revealed that cash and cash-equivalent incentives, other than toys and carbon off setting, cannot be used to entice new customers without being offered to renewing customers. This means the savviest consumers who shop around each year will see prices rise and discounts and offers disappear.

“However, there is an opportunity for the industry to take advantage of all this change that is coming and do something that will be good for brands, good for the industry and good for consumers."

Consumer Intelligence PR and communications manager, Catherine Carey agreed, and described the victory as “a shot in the arm for innovation.”

Carey said the move “presses a giant reset button on the relationship between price and value, it will change the relationship between brands and consumers.”

She explained, “We expect to see insurers changing their models and new firms entering the market for the first time as loss-making year one pricing phases out. If you look at these new rules, and specifically the introduction of fair value, it’s the most exciting time for the development of the general insurance market for decades.”

Hughes also warned against insurers resisting the regulatory change, “Those that don’t take advantage of the opportunity are going to find it really tough.”

He added, “The tipping point we find ourselves at today is a critical point in the journey of this industry and there is an opportunity to be positive.”

 

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