A Dublin registered company involved in providing data analytics for insurance brokers has claimed in the Commercial Court that two firms are breaching its intellectual property in relation to product algorithms used in selling insurance to customers.
XS Direct Holdings Ltd, part of a larger XS Direct Group, is suing Mulsanne Insurance Co Ltd, registered in Gibraltar, and Ormiston Holdco Ltd, registered in Jersey, seeking a declaration that an intellectual property assignment agreement of September 2023 is valid and enforceable. It is also seeking damages.
A co-plaintiff with XS is Dublin registered Beach Point Capital (BPC) Ireland Lending DAC and BPC Ireland Lending II DAC which are senior lenders to the XS Group and hold certain security over the assets of XS Direct Holdings and certain related companies including XS DirectInsurance Brokers Ltd.
BPC Lending II appointed receivers over XS Direct Insurance Brokers in February 2022 and holds a fixed charge over certain valuable intellectual property rights with the XS Group.
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XS Direct Group founder and CEO, Chris McCann, says the most valuable aspect of its product is algorithms which are based on data and claims made during the period following the initial writing of the XS Directcore product.
It represents 12 years of accumulating the necessary data and its revision which informs the underwriting and pricing models.
Its attractiveness was that it facilitated the sharing of risk withinsureds via high levels of excess which results in lower premiums for customers who don’t have, for example, no claims bonuses and who might be otherwise outside the standard market for other insurers.
The case was admitted to the Commercial Court on Monday by Mr Justice Michael Twomey on the application of Hugh O’Keeffe SC, for XS and on consent from John O’Donnell SC, for the defendants.
Mr O’Keeffe said the claim for damages was in excess of £3.5 million (€4 million) and there is very considerable complexity to the case.
Counsel also said there had been efforts to have the dispute arbitrated but it was ultimately agreed this would not lead to a resolution.
In an affidavit, Mr McCann of XS, said the firm’s core product has been particularly successful in the UK since it was launched there in 2009.
In 2022, Mulsanne Insurance, the first defendant, was interested in entering into an intellectual property licensing agreement of the product when XS Direct Insurance ceased trading that year, he said.
A heads of terms agreement was entered into between a newly incorporated XS company, XSV IP Ltd, and Mulsanne Insurance which then became an underwriting entity using the XS algorithms, he said.
While Mulsanne honoured its first payment obligation of more than £98,000, no further payments were received by XSVI IP, he said.
In March 2024, Ormiston Holdco, the second defendant, said it was no longer supporting Mulsanne’s delivery of all sections of the XSproduct and proposed walking away from the deal, he said.
Mr Justice Twomey approved directions for the progress of the case through the Commercial Court.
He added that while he had heard what happened in relation to mediation efforts, there could still be some other independent form of resolution to the dispute.
