Daily briefing: Tuesday – Omega merger looks nearer

Is Omega finally ready to accept a merger? The Lloyd’s insurer has not been short of interest in recent months but a deal has yet to emerge. However, Novae is on the prowl and this deal could prove too good an opportunity to resist.

Since a boardroom dispute and a complete overhaul of its management , Omega has had a rough time. Exposure to a number of major catastrophes has hit its bottom line and like so many of the smaller Lloyd’s insurers it has become a prime merger target.

Canopius was credited with an interest in January, but talks fizzled out. In March, Omega said it had received a number of other approaches, thought to be from US-based insurers. It appears that Omega is prepared to talk but has yet to find its perfect match and the right price.

So what about Novae? The company has been turned on its head by chief executive Matthew Fosh, as he explains in an interview revealed today. Like its Omega counterpart, Novae is suffering from a poorly valued share price (currently around 369p). Fosh has already hinted that the insurer would be prepared to discuss a sale, albeit on its own terms. This could send out signals to potential bidders but how long can Novae wait to become a target?

The Omega deal would give it something new to think about, strengthening both firms, but is Novae willing to take a gamble on a company that may only offer it limited value? One thing’s for sure though, there’s a deal to be done somewhere for both of these firms, and it’s unlikely to be far away.

Howden fights its corner

We also revealed today that broker Howden is preparing to fight the outcome of a legal battle in Spain where it has been ordered to pay €1.76m in compensation to Spanish broker Morera & Vallejo for breaching restrictive covenants. The long-running dispute stretches back five years when staff joined Howden Iberia from the rival broker and allegedly took clients with them. Howden is taking the case to the appeal court in Madrid. These types of cases happen regularly in the UK insurance market, but rarely are there such high costs involved. It’s a big risk to take for any broker right now.

New boss for Apil

Former Legal Complaints Service chief executive Deborah Evans was today named boss of the Association of Personal Injury Lawyers (Apil), which noted her track record of ‘fighting on behalf of injured people’. Insurers will most likely be watching her impact with interest, and it comes just days after the Legal Services Board decided not to introduce a ban on referral fees.

Danny Walkinshaw is digital news editor.