The deal will see St Andrews take over the underwriting of Paymentshield's range of award winning products including buildings, contents and mortgage payment protection insurance and will make St Andrews a major underwriter of general insurance products in the mortgage intermediary channel throughout the UK.
This move fits with the HBOS General Insurance strategy of gaining greater presence in the intermediated mortgage market, leading to a wider distribution for products underwritten by St Andrew's.
Paymentshield will continue to market it's products to mortgage intermediaries and IFAs and handle all policy administration and premium collection. St Andrews will administer all claims through its award winning claims service for buildings, contents and mortgage payment protection insurance.
Graham Boulger, Paymentshield's group sales director, says: “The recent management buyout of Paymentshield was the foundation of our future growth strategy and the deal with HBOS is a further step towards our objective. We aim to provide intermediaries with the very finest products at highly competitive prices whilst benefiting from the massive underwriting experience of the HBOS Group.
“We have enjoyed an excellent working relationship with Hamilton Insurance over a long period of time and we hope that this continues with Hamilton underwriting niche and specialist products for Paymentshield.”
Howard Posner, chief executive of HBOS General Insurance, says: “The decision for us to underwrite Paymentshield buildings, contents and creditor products will give HBOS General Insurance a huge advance in the UK underwriting market. Currently, about 80% of all UK mortgages are introduced by intermediaries, therefore, by aligning ourselves with Paymentshield we will be able to offer our award winning Halifax General Insurance claims service together with a well respected high street brand.
“In return, we will expand upon our market share in this field throughout the UK. It is expected that we will underwrite an additional 800,000 policies in the first year alone, with a GWP of £114m.”