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I worked for Parabis at its height and I am shocked at the scale of the problems that have emerged. They had seemingly excellent insurer partners in DLG and RSA which seemed like the right strategy for the future.

However, there is a telling reference in the article to a 'lack of leverage' with their insurer partners and this is a real issue in the industry. The balance of power is so heavily weighted in favour of the insurers in any of these ventures that it must make management of relationships impossible!

My guess is that the insurers got what they wanted out of Parabis but when the reforms came in, they were no longer needed. That must be a very clear warning of the problems that such large scale ABSs can create. When things go wrong, they go wrong in a big way.