GRE pays pounds 435m for private medical insurer

Guardian Royal Exchange is to buy PPP Healthcare Group, the UK's second largest private medical insurer, for pounds 435m. The buy will give GRE almost a third of the UK health insurance market. Sameena Ahmad reports.

In addition to the cash from GRE, which includes pounds 141m of goodwill, PPP Healthcare Medical Trust, the charity which owns PPP Healthcare, will receive pounds 125m in dividends from PPP Healthcare, bringing the total paid to pounds 560m, the largest single donation ever made to a UK charity.

The purchase will add PPP Healthcare's 28 per cent share of the UK health business to Guardian's 4.5 per cent to create a business with almost one-third of the UK health insurance market.

John Robins, GRE's chief executive, said the deal would give GRE a "significant platform for future growth." He said that in addition to a strong position in private medical insurance, PPP Healthcare had an 85 per cent market share in the rapidly growing dental care finance market and a 60 per cent share in the long-term insurance care market.

Growth prospects were excellent in these businesses, he said. "In the UK less than 25 per cent of the traditional core market for private medical insurance - namely ABs - has a policy." The new Guardian business will have 2.5 million direct customers in the UK, all of whom will have access to Guardian's other insurance products, said Mr Robins.

GRE's enlarged health insurance business will be led by Peter Owen, PPP Healthcare's chief executive. Mr Owen said: "In choosing Guardian Royal Exchange we have found an excellent parent. Today's announcement brings tremendous opportunities for PPP Healthcare.

"With GRE's significant distribution opportunities we will be able to offer our customers an even better service and explore new ways to help more people address their healthcare needs."

Guardian's shares fell 10p to 324p after the announcement. However analysts said the insurer had paid a good price and the fall was related more to a cautious trading statement accompanying news of the deal. Guardian is paying a 48 per cent premium to the value of the PPP business.

GRE said profits this year would be lower than expected because of losses, including a pounds 15m loss relating to a fire at a Boots factory in October.

Competition in the private medical insurance industry has intensified in recent years with flat sales and new entrants squeezing profits.

Nevertheless, healthcare is one area where pressure is likely to grow on governments around the world to encourage individuals to make their own provision and offset the rapidly escalating costs of state provision.

Start your day with The Independent, sign up for daily news emails
Life and Style
tech
Arts and Entertainment
Rocky road: Dwayne Johnson and Carla Gugino play an estranged husband and wife in 'San Andreas'
filmReview: In the face of all-round devastation, even Dwayne 'The Rock' Johnson appears a little puny
News
i100
Arts and Entertainment
Bright lights, big city: Melrose Avenue in Los Angeles by dusk
books
Sport
Harry Kane makes Paul Scholes' Premier League team of the season
footballPaul Scholes on the best players, managers and goals of the season - and the biggest disappointments
News
i100
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor