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CPPGroup pays millions to sever contract with SSP

CPPGroup pays millions to sever contract with SSP | Insurance Business UK

CPPGroup pays millions to sever contract with SSP
An insurer has paid £6.5m to sever its contract with SSP, a move that comes as the insurance platform continues to grapple with the effects of a major outage.

CPP Group, a credit card and mobile phone insurer, said it had decided to replace the SSP technology with a platform based on its existing systems, after a thorough business assessment.

The insurer confirmed the move in a statement, explaining: “CPP recently completed an in-depth review of its current IT arrangements and likely needs over the coming years. The change in product and service focus drives a change in the group’s IT requirements.”

The company said it has informed SSP that it intends to develop its own platform, which will be “built on its existing systems and be more relevant to CPP’s customers.”
It said its decision to cut ties with SSP would give rise to a one-time write-off of capitalised expenditure of approximately £6.5m, together with a cash payment that is currently being finalised.

The move comes as SSP endures the fallout from a two-week power outage at its Solihull data centre, which left some customers unable to do business.

Rupert Bidwell, head insurer for Europe at SSP, told Computer Weekly that CPPGroup’s decision to ditch its technology was unrelated to its recent service troubles.

An SPP statement released earlier this week claimed that around 90% of the affected brokers were now back online, but some users continue to report problems.
Whilst the buyout fee paid by CPP seems sizeable, it is part of a wider strategy which has seen the firm undergo a number of senior management and business changes in a bid to return the company to sustainable growth.

The company said it is striving to create a more “cost-effective” and “flexible” organisation, which looks to be paying off - CPP Group reported an operating profit of £3.6m during the first half of 2016, up from £1.9m the previous year.

“The operating and financial benefits of this change are important to the development of the business and will accrue from 2017 and beyond,” the company said in a statement.

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