TEN UK INSURERS DISSOLVED LAST YEAR
Monday 14 February 2011, London – A new report from Bannister International Research on the United Kingdom non-active insurance (also known as the legacy / run-off) sector shows that 10 companies were dissolved in 2010 and a number more were placed into formal liquidation.
Research published in The London Market Run-Off Yearbook 2011 edition, a 550 page volume, charts the progress of more than 230 UK non-life general insurers that are in run-off.
The UK has been a laboratory for ground-breaking techniques for dealing with formerly active insurance companies and has seen many millions of dollars / sterling of reserves speedily returned to policyholders and potential claimants.
Using a variety of tools, the market has come to grips with complex problems thrown up by London’s subscription insurance market, where many companies and Lloyd’s of London typically shared small percentages of insurance risks. With Schemes of Arrangements speeding the ‘glacial’ claims process, administration expenses are not given the opportunity to deplete the reserves established to pay for future claimants.
Julius Bannister, author of the report said: “We have seen common sense prevail in many situations where, should nature take its course, an insurance company may have to exist for many decades to pay all genuine claims.
“The speeding up of the natural claims process has saved millions of dollars that would have been eaten up by adm9inistration expenses over these decades, the consequence of which might be that policyholders will find that there is nothing to pay their genuine claims, such as those for asbestos exposure, in the year 2030, 2040 or beyond.”
He concluded, “London has developed a special skill-set to deal with legacy problems. The success of this process naturally leads to these skills being exported to deal with legacy problems elsewhere and both Europe and North America have, in certain cases, proven to be fertile environments for accelerated run-off.”
The run-off market meets for specialist working and networking conferences in the next few weeks, a constructive face-to-face dialogue being essential to unlocking the problems of the past: The Association of Run Off Companies www.arclegacy.eu meets on 23rd February in London – AIRROC Association of Insurance & Reinsurance Run-Off Companies www.airroc.org membership meeting on 3rd March in New York – The Randall & Quilter Investment Holdings Plc Commutations Rendez-Vous, Cologne, Germany from 4th – 6th April http://www.rqih.com/rendezvous/cologne/2011