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A major customer of SSP has agreed to stump up £6.5m to sever ties with the beleaguered insurance software provider, following an “in-depth review” of its IT platform requirements and costs.
CPPGroup, a provider of credit card and mobile phone insurance, confirmed the move in a briefing note, where it set out its intention to replace SSP’s technology with a platform designed in-house.
“CPP recently completed an in-depth review of its current IT arrangements and likely needs over the coming years. The change in product and service focus drives a change in the group’s IT requirements,” the statement says.
“As a consequence, CPP has informed SSP Ltd (SSP), its current IT development partner, that it intends to develop its own IT platform, which will be built on its existing systems and be more relevant to CPP’s customers … and support the group’s growth internationally.”
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SSP confirms to Computer Weekly it has no clear idea when all brokers will be able to continue doing business via its SaaS platform, two weeks on from Solihull datacentre power outage.
Insurance brokers hit out at disaster recovery arrangements, fearing two-week outage could put them at risk of action by Financial Conduct Authority.
The move is part of a wider turnaround strategy for CPPGroup, of which it outlined details in its half-year results, published in August 2016.
The strategy has already seen the firm undergo several senior management and business changes in recent months in a bid to return the company to sustainable growth.
The changes appear to be paying off, with the company reporting an improved operating profit of £3.6m during the first half of 2016, up from £1.9m the previous year.
The change in IT strategy is billed as an important part of CPPGroup’s push to create a more “cost-effective” and “flexible” organisation, the company said in a statement.
CPPGroup has agreed to pay SSP a one-off fee to end its contract with the company, along with a further, still to be negotiated, cash sum to follow.
While the size of payment may seem substantial for a company intent on saving money, CPPGroup said the move will benefit the firm financially in the long run.
“The operating and financial benefits of this change are important to the development of the business and will accrue from 2017 and beyond,” the company said in a statement.
Computer Weekly contacted CPPGroup for comment, but the company had not responded at the time of publication.
The news comes at a difficult time for SSP, which has found itself under fire from the insurance broker community after a power outage at its Solihull datacentre knocked its cloud services offline for two weeks, leaving insurance brokers around the UK unable to trade.
An SSP statement earlier this week claimed around 90% of the affected brokers were now back online, but some users continue to report problems.
Rupert Bidwell, head insurer for Europe at SSP, told Computer Weekly CPPGroup's decision to ditch its technology was unrelated to its recent service troubles.
“CPP’s decision not to complete the implementation of a new IT platform working with SSP was the result of CPP’s changing business strategy and product focus. SSP has been working constructively with CPP to support this change of direction. We would also like to reiterate that the decision was in no way influenced by the incident at our Solihull data centre on 26th August," Bidwell said.