New FSA Restrictions for CPP

CPP has warned that it’s performance next year will be “materially below” how it performed in 2012 after agreeing new restrictions on it’s mobile phone insurance with the FSA.

The York based company also told shareholders that due to the new restrictions being put in place by the FSA, it would have a “material impact” on it’s ability to raise debt finance.

Discussions are however ongoing with the FSA over how CPP can compensate customers and the firm has set aside £25m to meet that cost.

Chief executive Paul Stobart said, “During the period we have made important progress with the FSA while the group continues to implement its new, customer-led strategy and to address past shortcomings.

“We have a clear roadmap that will, we believe, ultimately allow us to establish a market leading customer service organisation in the UK that can offer customers a broad range of innovative, compelling and affordable retail products. We are very focused on working closely and co-operatively with the FSA to achieve this.

“Importantly, we continue to trade profitably, with a net funds position and millions of customers who truly value our products and the service we provide to them. We are focused on delivering our plans for the current financial year and positioning the group for growth in the longer-term. I remain confident that the progress we are making will provide the Group with a strong platform to move the business forward successfully.”

Since June this year, the firm has seen revenue fall 6% from the same period last year and renewal rates have also declined by 0.6%. The number of live policies has also fallen by 500,000.