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17th of May 2012

UK housing groups look at PCCs

Vicky Beckett 11/10/2011

Three UK property housing companies predict to save hundreds of thousands of pounds a year from joining a protected cell company.
 
Affinity Sutton has teamed up with broking firm, Acumus, which has launched Guernsey-based Igloo Insurance PCC to avoid market volatility and to lower risk management costs.
 
The affordable housing association, Affinity Sutton, claims to be the first in the sector to adopt a protected cell company (PCC) arrangement.
 
Affinity Sutton is writing property risks into the PCC. High level claims will be covered by a third party underwriter.
 
Gallions Housing Association, south-east London, and RCT Homes, Wales, are also set to join Igloo.
 
Affinity Sutton said Igloo will provide them with long-term stability in pricing and savings as a result of risk management.
 
Jack Bargholz, Affinity Sutton director of financial services, said: “We were observing a constant pressure on our premiums, especially on our property insurance which is the biggest part of our insurance with 56,000 properties.”
 
Bargholz said once the PCC is embedded into the company’s risk management program and a stable environment is achieved he will look at putting more risks into the PCC.
 
“I think it has a very solid business case for sizable housing associations. I could see more companies like ours following, but other housing associations do already have other various types of self-insurance,” added Bargholz.
 
Tony Cotter, chief executive of Gallions Housing Association, said: “This type of scheme is one we have been interested in for some time and offers the potential to avoid the pitfalls of the normal volatility of the insurance market.”

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