This follows a difficult few days for the company during which NIG – the UK's largest insurer of vehicle warranties – announced it would not be renewing Warranty Holding's underwriting agreement when it comes up for renewal, although it is unclear when this will be. It has also issued a statement announcing that group managing director David Shapiro is no longer employed following an investigation into “certain irregularities”.
Tom Malcolm, corporate affairs manager at Ford, says: “By the time the NIG contract comes to an end, Warranty Holdings will have a new underwriter. Existing policies are being honoured.”
He insists NIG's decision was strategic and did not mean the business is struggling. “Warranty Holdings is a wholly-owned subsidiary of Ford, and will remain so. We continue to have the same commitment to the business as when we acquired it,” Malcolm adds. NIG, part of the Churchill group, is believed to have sold its special risks portfolio – of which the Warranty Holdings business was a part – to a company called UK Underwriting, which is expected to cherry pick the parts it finds attractive.
The sale helped trigger lively discussions at internet chatrooms about the future of Warranty Holdings, as dealers speculated about the reasons for NIG's move, about potential losses in the underwriting sector, and about the future of key executives. Malcolm warns that some of the content could be libellous. “It is nonsense to say the business is in financial trouble,” he says.
Some of the claims led Ford to issue a statement about Shapiro. “During a routine internal audit of policy, procedure and processes at Warranty Holding, certain irregularities were identified,” reads the statement. “As a result of this investigation, group managing director David Shapiro is no longer employed by Warranty Holdings or its associated group companies.” The irregularities “do not impact” on the underwriting funds supporting the business, it adds.
Warranty Holdings was one of a number of companies acquired by Ford in the late Nineties, under the leadership of Jacques Nasser. Following Nasser's dismissal, the company sold Kwik-Fit and its stakes in Pendragon's Ford business and the Howard Basford bodyshop chain.