Cornhill buys Pet Plan for pounds 32.5m
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Your support makes all the difference.Patsy Bloom and David Simpson have made a spectacular 64,900 per cent return on the pounds 500 they originally invested in starting Pet Plan 20 years ago. The business, now the UK's largest pet insurance company, was yesterday sold to Cornhill Insurance for pounds 32.5m.
The idea for the Pet Plan business came to Ms Bloom after she was hit by high vet bills for her pet dog. It has since become a kind of Bupa for pets, with policy sales of pounds 40m last year.
Animal lovers can insure dogs, cats, even horses. Policies cover a range of accidents and illnesses including vaccinations, fractures and other treatments.
Commenting on the sale, Ms Bloom said: "I'm delighted. The company has reached the stage now when it needs really serious investment. It's the right time."
Both Ms Bloom and Mr Simpson will remain involved in the company. Mr Simpson becomes chief executive of the new Cornhill subsidiary while Ms Bloom will remain a director in charge of marketing and promotion. Ms Bloom, a former Veuve Clicquot Businesswoman of the Year, said she had no immediate plans to spend the money: "I'd like to be a lady who lunches, just for a while."
Pet Plan has seen a variety of quirky claims over the years. Recent claims include one for Rocky, a Cavalier King Charles Spaniel that was frightened by a hound's noisy bark, spun into the air and fractured its elbow (claim for elbow fracture: pounds 996.77).
A claim for a Wolfgang St Bernard was even more painful. The dog fell off a cliff onto a Devon beach, sustaining multiple fractures (claim: pounds 1,276).
Pet Plan's staff of 200 will remain at their headquarters in Brentford, Essex. Cornhill said yesterday that there were no present plans to cut jobs at its new subsidiary.
Cornhill already provides the underwriting for Pet Plan's range of pet insurance contracts. Denis Loretto, a director at Cornhill and chairman of the new Pet Plan board, said yesterday: "We have been very pleased with the underwriting of this portfolio since the beginning of 1994 and have built up a very beneficial partnership. We look forward to achieving even greater success under the new arrangements."
Pet Plan, which provides cover for all domestic pets, now has about 400,000 policyholders. The company achieved pounds 1m of premium income in 1983. This grew to pounds 22m in 1992 and reached pounds 40m last year. Last month Pet Plan launched a special credit card aimed at the UK's animal lovers.
Pet Plan has 42 per cent of the insured market, but has so far only made a minor dent among the UK's 6.8 million dogs, of which just 12 per cent are insured, and 7.2 million cats, of which just 3 per cent have cover.
Pet Plan also has 30 per cent of the insurance market among the UK's 450,000 horses.
Cornhill is part of the Allianz Group in Germany, the largest insurer in Europe. The company's gross general business premium income reached pounds 1bn, while its pre-tax profits last year reached pounds 73.5m, 12 per cent up on 1994.
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