U.K.’s Claims Direct Reports Loss

March 28, 2002

Claims Direct, the U.K. company which provides insurance settlement services, reported that it expects a loss of £22 million ($31.3 million) for its fiscal year ending March 31.

The company, which had a great deal of early success, fell on hard times when a number of its clients protested against what they perceived as excessive fees charged in connection with their claims. Following a BBC report on their grievances, new business practically ceased.

Claims Direct’s founders, who had sold their interest in the company, then tried to take it over. The resulting fight saw a merger between privately owned Claimline and Claims Direct. It was hoped that the combination could return the company to profitability, but due to a number of factors this hasn’t happened yet.

Management is presently working on implementing a new business plan based on the model Claimline uses. Ronnie Henderson, chief executive, told London’s Financial Times that “The recent acquisition of Claimline, the launch of the new business model and other developments referred to are all building the platform from which we can re-establish Claims Direct’s business and restore its reputation.”

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