Aviva pays £120m for used-car data firm

Aviva, the UK's largest insurer, took its first steps into the second-hand car market yesterday, as its subsidiary Norwich Union Insurance picked up HPI Group - a used-vehicle data provider - for £120m.

HPI, which is owned by Phoenix Equity Partners, a venture capital outfit, owns the largest database of motor vehicles in the UK, allowing potential buyers to check details of a used vehicle. The database is also used by car finance and insurance companies to verify the details of a vehicle which they are lending money for or insuring, as well as by the police and motor dealers.

Aviva said the company would give it a new means of capturing customers for its motor insurance business. Research showed that one of the most common times for customers to change their insurer was when buying a vehicle, it said.

The group added that HPI had plenty of potential for revenue and profit growth, as it is used by just 5 per cent of those buying used cars in the UK. HPI has a 60 per cent share of this market.

Over the year to March 2004, HPI's sales grew by 36 per cent to £22.5m, and over the calendar year as a whole it is estimated to generate profits of about £10m. The company, which is based in Salisbury, employs 191 staff.