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Quindell’s numbers for accrued revenue on Industrial Deafness will prove to be fantasy, in my opinion. That will mean massive writebacks of revenue and profits already booked, that all earnings forecasts are wrong and that a company threatening cash crisis is on the way by early 2015. Prompted by a former senior Quindell staffer to whom I have been speaking I went “undercover” today to show why.
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Comments
Pimpi
I vote for Tom W at the next general election. Are you running Tom?
Stipe123
A large number of Quindell shareholders seem to be suffering from industrial-scale deafness. Perhaps RT can help them out as well?
TurboMuncher
Tom
Interesting article. I have some knowledge of how money moves around the value chain for claims, wether derived from insurer deals or acquired from CMC’s (of which Zebra is one).
I would ask (and this is not intended to be a rebuttal, these are genuine questions) whether you are certain that:
1) The up front acquisition fee (or more likely “marketing costs”) are paid to Zebra on conclusion of Part 1 (of 2) and on them sending your ‘case’ to QLS? This is pretty likley, however;
2) These deals with CMCs would often have what is called “acceptance periods” or “replacement periods”. In other words, if a case was proved to be a non-runner by, say, working day 30 then a replacement case would be provided at no cost. Or maybe the initial cost isn’t payable until an agreed day 30?
3) Just to be clear – becasue I genuinely do not know and can not be bothered digging out the presentation from QPP – is the mythical 6,000 per month fee bearing cases supposed to be AFTER QLS have done the screening? In other words, are they claiming that they will get far more than 6,000 “stage 1” type cases from the likes of Zebra, all of which will pass screening or that they will receive, say, 12,000 such “leads” per month of which 50% will ‘convert’ on passing the hearing test?
4) If I were analysing a big market player’s claims figures like QPP, I would reverse engineer their target for fee bearing and use known industry factors:
6,000 fee bearing cases, given that the insurance industry are only paying out on 20% of claims against them, would be 30,000 per month who had got past the screening test at stage 2! Just having a hearing problem and it being LIKELY to be a former employer’s fault doesn’t = fee bearing (winning) case! Many of these firms as you rightly say don’t exist any more. Many more will find it extremely difficult to prove their employer caused their suffering through negligence. Some might exist but weren’t insured for the period so no point pursuing.
Anyway, 12,000 per month pass the stage 2 test means probably 25,000 enquiries get to the stage 2 test (ie pass stage 1 and convince the likes of Zebra the test is worth them paying for). That means, in all likelihood, the likes of Zebra would need to generate upwards of 50,000 calls per month into their collective contact centres to provide 6,000 fee bearing cases per month. I can tell you that only heavy, above the line marketing campaigns could even come close to this (if so many people existed) and the acquisition costs of each case would therefore be prohibitive. So I must ask – are you sure you have RT / QPP’s figures correct?
Cheers
TM
Forty two
I believe Zebra is related to Gibralter based Enterprise Insurance, which my very reliable sources tell me is the largest Q client. Aviva? Direct line? Rac? Sling yo hook fellas : )
Tom Winnifrith
Pimpi
Only place I am running is for the airport the day after www.ukinvestorshow.com ( remember to book your tickets). By PM of the 19th April 2015 I shall be back in Greece escaping the whole election and working on the hovel!
T
Tom Winnifrith
TM
Presentation says that 6k cases pcm will be won ( hence revenue assumption). At AGM RT said we are already doing 6k cases pcm. Hence from that – and accruals booked in H1 – we assume 100% win rate is being assumed by Mr 2+2 can = 5.
I gather QPP pay after part 2 ( cursory medical check). I am pretty sure that if A Mr M Mouse is sent over to QPP then it would get a replacement even if Mr Mouse had passed the medical.
The issues on ID will be that during the 32 months until the case settles Aviva will bash each claimant on so many points and most will get flushed out of the system (85%). That is not discounted in the QPP accruals number ( assumes 100% win rate average case length 9-12 months) is it?
T
Dave Holes
‘I go undercover…’ – I think that’s stretching things a trifle. ‘I make a phone call..’ would be closer to the truth. FFS – talk about bigging yourself up.
David Dunham
“He approached his manager to flag up a number of concerns but chief among them was that he did not believe in the quality of claims that Quindell was processing given from where they were sourced and so he did not believe that it would deliver the cash promised.” Sounds far fetched – why would a “senior” former employee say to “his boss” that he is “worried about it delivering the cash promised.” Sounds like more made up rubbish to me!
David Dunham
Tom, some facts you have not taken into account in your undercover work:-
Any low quality/dubious cases are replaced at no cost. With its rigorous double testing and Lawyers present for both tests means it is able to improve the quality of cases that it has decided to run with.
Revenue is recognized over 18 months for hearing loss cases.
Tom Winnifrith
David
well at least you did not have a go at me for being Jewish in this post (not that I am)
You accuse me of making things up. Just because it is an inconvenient tuith for a QPP moron like you. I didnt make anything up.
Aha rev recognised over 18 months. But the average ID case will last 20-32 months?
QPP takes on cases refered to it by Zebra etc without any part in the testing. And you can replace duff cases all you want. There are only 20k legit cases in the UK each year. QPP is accruing to win 72k pa.
T
Phil
Senior managers do resign of principles, I have done it and I know others.
No senior manager of any weight would want qpp on their cv
DiscoStu
It’s difficult to take David ‘Davyecaferacer’ Dunham seriously when he was telling anyone who’d listen on the LSE QPP BB that “I can assure everyone that DiscoStu is Tom Winnifrith”, plus yesterday he was telling his little band of QPPSAD followers how QPS Scaffolding was a property insurance claims company. That’s was a bit of a ‘scaffolding pipe’ dream, I’m afraid, Davey.
Still, maybe he will learn one day that DYOR doesn’t mean “Dick Your Orofice Rob?”
GA
Great work Tom! I honestly don’t know how you do it. Based on your findings it would seem that the research note from Canaccord in July was incorrect. Do you think it’s grounds for suing them?
Dave.j
Tom,ive read the article a couple of times and dont see anything wrong with how they handled your claim,im not a Qpp champion but surely thats how all claims are processed to begin with.If you managed to gat to the consultation stage you would be found out to be a fraud surely.Having said that look at all the corruption in the benefit system a fraudulent claim is hard to prove.Not saying your wrong but what you have thrown up is not a red flag in my oppinion.
Tom Winnifrith
Dave J
I accept that my “claim” is of the Mr M. Mouse variety and would probably have been weeded out before I got to QPP.
My point is that the process would not weed out the sort of claim that ends up as a nil claim (while not being totally bogus) & nil claims acccount for 85% of claims received by insurers like aviva today. The number of actual valid claims is static at c20k per annum, yet QPP is claiming it will do 72k successful claims a year.
I am sure it will process 72k but I put it to you on the basis of the cursory checks those entering the system undergo – as I demonstrated – that nearly all of the 72k will end up as nil claims.
T