Animal Friends Insurance (AFI), a not-for-profit pet insurance business, has a High Court injunction which paves the way for its customers to make a smooth transition from the company's previous underwriters, Equine and Livestock Insurance Company (E&L), to Red Sands Insurance Company (Europe) Limited.

Equine and Livestock terminated their underwriting agreement with AFI in February 2008, citing unprofitablility of the book for them as the reason.

Negotiations over the transfer of the book to Red Sands Insurance Company (Europe) Limited foundered when E&L demanded £750,000 from AFI for the transfer and for their agreement not to solicit AFI customers.

Following legal advice AFI wrote to its customers offering to renew policies with Red Sands. This spawned letters to AFI customers from E&L which caused great confusion amongst customers as to what was happening with their insurance. The letters also offered first a 10% then a 20% discount to tempt AFI customers to renew with E&L and not to stay with AFI.

AFI therefore applied for an emergency injunction to prevent E&L making further contact with AFI customers (except in agreed situations, notably claims), to stop the escalating confusion and also to require them to acknowledge renewals advised to them by AFI into Red Sands and not to take further payments on those insurances. The application was successful.

Elaine Fairfax, Managing Director and Founder of AFI said: "I am delighted at the Court ruling. It has resolved the terrible confusion that followed E&L's letters to our customers. Unfortunately we know that some customers said they would renew with E&L thinking they were staying with us! Now we can simply renew our customers' policies with our new underwriters as we had originally intended to do at no inconvenience to them as they need do nothing if they want to stay with Animal Friends. They will enjoy exactly the same policy terms and premiums as before and our underwriters will even take on existing ongoing conditions where a policyholder has lifetime cover."

She added: "Although this has been a horrible experience we are delighted to have new underwriters as they have given us authority to handle everything in-house. For vets this means that Animal Friends will now be handling claims at our Wiltshire H.Q. We have a bespoke pet claims software systems and veterinary nurse staff to give the best possible service. We have the facility to pay claims swiftly direct into a customer's bank account or direct to a vet. It is also exciting that we shall be able to draw on Hollard's* international pet insurance experience to introduce some unique new products and ideas into the UK pet insurance market in the near future."

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