FCA hits PE-backed insurer with growth cap over governance concerns
Watchdog restricts customer numbers at Markerstudy, a personal insurance group backed by Bain and Pollen Street
A private equity-backed UK insurance group has had its expansion plans thrown into disarray, after the Financial Conduct Authority restricted activities across its licensed businesses due to concerns about governance and financial controls.
Markerstudy, whose owners include private equity groups Pollen Street and Bain Capital, has had restrictions put on customer numbers and capital across its sprawling operations until it resolves concerns raised by the FCA.
Many of these stem from its rapid acquisition-fuelled growth, including weaknesses in its leadership, governance and financial controls, according to people familiar with the measures. Markerstudy’s businesses provide home, car and pet insurance products and other related services to more than 8mn customers across the UK.
“A cap has been agreed with the FCA that both parties consider appropriate and consistent with our strategy and customer-focused growth ambitions,” Markerstudy told the FT. “We continue to operate at mandatory solvency margins and carry a buffer in line with regulatory requirements.”
The restrictions could disrupt Markerstudy’s path to a potential IPO that was expected to value it at about £3bn, according to a Bloomberg report in November. However, a person familiar with the insurance group said it had no plans to float. The FCA declined to comment.
One of the more than a dozen Markerstudy businesses hit by the restrictions is Brightside, which was co-founded by Arron Banks, a senior figure in Nigel Farage’s Reform UK party. Banks was ousted from the business in 2012.
Another is Atlanta Group, which owns the Swinton, Marmalade and Healthy Pets brands and was acquired by Markerstudy in a £1.2bn deal in 2024.
The businesses have agreed so-called voluntary restrictions, which the FCA often uses as an alternative to enforcement action. The watchdog does not announce voluntary restrictions, but it records them on its register, making them a more discreet tool.
Markerstudy’s regulated businesses have had a notice added in the FCA register saying they must not “take any steps” without consent to exceed a limit on the number of customer policies and they must “maintain an agreed sum of funds”.
Markerstudy was created in 2001 by former Lloyd’s underwriters Kevin Spencer and Gary Humphreys. Backed by Pollen Street Capital since 2021, it has grown rapidly via a string of acquisitions.
The group is chaired by Benny Higgins, the former chief executive of Tesco Bank who was part of the Royal Bank of Scotland team including former disgraced boss Fred Goodwin that took over NatWest in 2000. He joined rival bank HBOS to head its retail business in 2006, but left shortly before its collapse in 2008 to run Tesco Bank.
Markerstudy made a post-tax loss of £141.7mn on revenue of £694mn in 2024, according to its latest published accounts. Much of this loss came from £136mn of interest it paid on its almost £1.4bn of debt.
Excluding interest, tax, depreciation and amortisation, the group made a profit of £60mn in 2024, up from a £12.9mn loss the previous year.
“Markerstudy has grown strongly in recent years and we maintain a close and collaborative dialogue with the regulators, part of which is agreeing appropriate levels of growth,” it said.
The FCA restrictions also apply to BISL, which owns the Budget, Bennetts and Dial Direct insurance brands, as well as Hughes Insurance Services, a Northern Ireland broker bought by Markerstudy in 2024, and Insurance Factory, which owns the Purely Pets brand.
The insurance sector has come under greater scrutiny by the watchdog since consumer group Which? last year used its power to launch a super-complaint about systemic failures and poor customer service in the travel and home insurance markets.