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RAC dumps 60% of accident management business

Date: 17 June 2008   |   Author:

RAC Accident Services is dropping 60% of its least profitable accident management customers as part of a revamp that also sees staff numbers drop from 140 to 60.

The move, driven by a need to become more profitable, means Norwich Union-owned RAC will only retain larger fleets, giving it customers that average 500 claims per year. It will also retain fleet business that combines with what a spokesman called "significant" breakdown or insurance business.

RAC is giving outgoing customers six months notice to find a new accident management provider, and said it will continue to support those fleets until then. "The customers [retained] either make a certain number of claims per year or can bring significant breakdown or insurance business, rather than having small fleets that never make a claim and are not doing anything for us but have an administration cost attached," said a spokesman.

There will be no redundancies at RAC and the 80 accident services staff no longer required will remain within the group, though Phil Mair, operations director for accident and legal services is leaving the company. The streamlined accident services division will be run by Colin Simm.

"We've taken on business indiscriminately and ultimately run at not much of a profit," said a spokesman. "We're in bringing in these changes so it's got a future. This is good for the future of accident services."

RAC aligned its accident management and legal services divisions in 2006.