RAC to pull out of Ireland by May 2007

The Royal Automobile Club (RAC) is to pull out of Ireland by May 2007, transferring its business to its sister company Hibernian Insurance.

The company, which provides about 5,500 private motorists with services from basic breakdown assistance to European cover and personal travel insurance, has already closed its offices in Rathmines in Dublin.

The RAC School of Motoring, also based in Rathmines, closed earlier this year.

The closure follows a review of the RAC's business in Ireland since it was taken over more than a year ago by insurance giant Aviva, the world's fifth largest insurance company.

Although less high profile than its competitor the AA, the RAC had developed a significant corporate client base in Ireland that included almost 30 per cent of the new car market.

Buyers of new marques including Ford, Volvo, Nissan, Honda and Daewoo were in the past offered incentives of free RAC membership or emergency breakdown assistance.

The RAC also provided services to well-known corporate companies such as Lease Plan Fleet Management, Venson Fleet Management, Allied Vehicle Management, Premier Direct Insurance Services and Permanent TSB.

RAC Ireland has already written to its corporate clients, assuring them that their existing arrangements and guarantees will remain in place.

However, the majority of individual policy holders have yet to hear from the company of its future plans.

Phone calls to the Rathmines offices of the RAC are now rerouted to Bristol in Britain.

A spokesman there said that since Aviva already owned Hibernian Insurance in Ireland, it was decided to move staff to Hibernian's offices.

RAC Ireland's customer care service manager told The Irish Times that it was currently "business as usual" for existing policy holders. She referred all enquiries to Cullen Communications, whom she said were the RAC press advisers.

However, Cullen said its contract had been terminated by the RAC and it was no longer in a position to answer questions on the company's behalf.

Hibernian corporate spokesman Terry Dinnigan confirmed that the RAC would not be offering services in Ireland from next year.

Mr Dinnigan said that since both Hibernian and RAC had been acquired by Aviva a review had led to the closures of the Rathmines facilities and the transfer of some staff to Hibernian.

Mr Dinnigan said that as RAC policies came up for renewal, policy holders would be offered Hibernian policies in their place and from about May next year, the RAC would not be operating in Ireland.

It is thought unlikely that the roadside branded image will be retained beyond that date.

He confirmed that some staff had taken redundancy. He estimated that the RAC would no longer be operating here after May 2007.

Its "book" he said would be fully acquired by Hibernian by then "in a smooth transfer of business". Letters would be sent out to individual customers over the coming weeks.

It is understood that no more than 10 staff were based at the Rathmines offices, and fewer than half of that number have transferred to the Hibernian building from where they continue, for the moment at least, to operate under the RAC Ireland name.

The RAC was founded in the UK in 1897, and introduced uniformed patrols in 1901 and roadside emergency telephone boxes in 1912.