Direct Line Insurance Group has applied for an ABS licence to offer legal services to its customers in partnership with Parabis Law.
The group already provides customers of its Direct Line, Churchill, Privilege brands with some legal services in-house and via outsourcing agreements with its panel firms.
The new law firm, DLG Legal Services, will extend the level of legal advice offered to its insurance customers to a range of “affordable” services, including management of their personal injury or non-injury claims and related debt recovery, employment and contract issues.
Direct Line Group chief executive Paul Geddes said in a statement: “We have the opportunity to protect our customers from excessive legal costs, especially in the event of a personal injury claim.”
Under the plans Direct Line customers will have the option of being represented in their claim by DLG Legal Services.
Partner-firm Parabis have a longstanding relationship with Direct Line Group who will subcontract a team of both legal and non-legal staff to the new venture.
Parabis senior partner Tim Roberts said in a statement: ”This is a very significant development in a period of major change in the delivery of insurance and legal services”.
Parabis bulked up its insurance offering earlier this year when subsidiary defendant firm, Plexus Law, merged with Greenwoods to create a £90m practice (7 May 2013).
Last year it became the first ABS-licensed law firm to receive private equity investment when it received a £50m cash injection from Duke Street (22 August 2012).
Meanwhile, FTSE100 insurer Admiral stepped into the legal sector via two ABS joint ventures earlier this year, with Bristol-based claims specialist Lyons Davidson and Cardiff-based compensation firm Cordner Lewis (8 April 2013).
Insurance intermediary BLG, the corporate behind the hugely successful ComparetheMeerkat brand, unveiled plans to acquire claimant firm Minster Law after it had gained ABS licence approval in May (31 May 2013).
DLG Legal Services is not expected to make a material contribution to Direct Line Group profits.
Direct Line confirmed last month that its legal team will be impacted by a group-wide redundancy round that puts 2,000 jobs at risk. The group, which is part of the Royal Bank of Scotland (RBS), announced the review as part of a new cost cutting plan to save almost double the £100m it had targeted to save back in August (27 June 2013).