Personal Group loses Royal Mail insurance contract

Personal Group reported good trading in an update to the market on Thursday, but that could change in March as the company announced it was being dropped as the insurance provider to Royal Mail's workforce.

The AIM-traded provider of employee benefits said the business was continuing to perform well with growth in new sales, top line revenue and bottom line profit.

Additionally, the company said Let's Connect - a home technology salary sacrifice business - had seen significant growth in sales and profit in 2015, following its acquisition in 2014.

At the same time, the company's board revealed that its relationship with Royal Mail Group was changing, and it would no longer be the supplier of core insurance products to the company's workforce.

Personal Group would stop offering the insurance products to Royal Mail employees from March 2016, with continuity of cover and payroll deductions continuing until 31 March 2017.

At that point, any Royal Mail employees wishing to continue with their Personal Group cover would be transferred from payroll deduction to direct debit.

Personal Group said it was in advanced negotiations with Royal Mail, however, to establish a relationship through its Let's Connect technology salary exchange division.

Following a successful competitive tender process, the contract would offer eligible employees home technology salary sacrifice benefits. The contract was expected to have an initial duration of four years.

"Royal Mail employees are some of our longest and most loyal insurance customers going back more than 25 years and for that we are very grateful," said Personal Group chief executive Mark Scanlon.

"Whilst our relationship will change and we will no longer be offering our insurance products to future RMG employees, we are delighted to be in the process of securing an additional trading relationship with RMG through PGH's Let's Connect business," he added.