Aviva buys vehicle check group

Norwich Union owner Aviva expanded its services beyond insurance today by buying a firm that specialises in combating fraud in second-hand car sales.

It has agreed a £120m (€179m) deal with Phoenix Equity Partners to purchase HPI Group Holdings, which provides vehicle status checks for would-be buyers.

HPI investigates whether a vehicle is subject to outstanding finance, is recorded as stolen, or has been written-off by an insurance company.

It also provides data on the current market value of particular models of second-hand cars and uses the National Mileage Register to ensure against “clocking”.

Based in Salisbury in Wiltshire, HPI has a 60% share of the market for vehicle status checks.

Its sales grew by 36% to £22.5m (€33.6m) in the two years to March and profits for the current calendar year are expected to be £10m (€14.9m).

Norwich Union chief executive Patrick Snowball said the deal would enable the group to capture new customers as buying a new car is seen to be the second biggest “trigger point” for people to change insurer.

It would also help Norwich Union to offer people a broader range of services such as checking a car’s history, insuring it and offering roadside assistance.

Mr Snowball added: “HPI is fast growing with significant opportunities to expand its own business.”

Around 6.8 million used cars changed hands in the UK last year, but industry data shows only 60% of these were checked.

A key area for expansion will be private deals as only 5% take place following a thorough investigation of a car’s history, Aviva said.

Aviva is the world’s fifth largest insurance group and made profits of £1.91bn (€2.8bn) last year.