Quindell 'to buy RAC out of car black box joint venture'

Quindell, the insurance claims processor, is to buy RAC out of its joint venture, according to reports.

The London-listed firm will announce on Tuesday that it is taking control of Connected Car Solutions, a business set up in April to install “black box” tracking devices in cars, Sky News reported.

The pair have jointly invested £30m in the tie-up, and planned to target 2.1m RAC breakdown customers with the devices, which record driving performance and reward careful drivers with lower premiums.

Quindell chairman Rob Terry had previously said the move would “revolutionise the insurance industry” and pave the way for them to sign the world’s biggest insurance-linked telematics contract. However, less than two weeks ago he admitted that the joint venture with RAC was “hardly a focus” and wasn’t material to the group’s earnings.

In addition, despite plans to install 50,000 “black boxes” each month from July, the process has not yet started, according to recent reports.

Tuesday's announcement is likely to trigger a £3.5m net cost to Quindell, but the removal of black box installation costs will have a positive effect on cashflow in the near future.

RAC did not return calls for comment. Quindell could not be reached for immediate comment.

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