Besso 2009 profits drop 73%

Lloyd’s broker Besso Holdings’ chief executive Colin Bird described 2009 as a “disappointing year” for the company after profits fell 73% to £539,224 from £2m in 2008, Insurance Times can reveal.

Besso attributed the sharp decline mainly to a reduction in interest income due to the fall in interest rates. Interest receivable fell to £171,920 from £1.3m.

The company was also hit by a loss of revenue from US bank Wachovia, a key client for Besso, as a result of the bank being sold to Wells Fargo, and the non-recurrence of £2.9m in revenue from CBC UK, of which Besso sold 75% in late 2008. Turnover from continuing operations, excluding CBC, fell to £27.9m from £28.3m.

However, the effects of these revenue reductions were masked by the strengthening dollar against the pound, the company said.

In his chief executive’s statement, Bird said the loss of the Wachovia revenue hit the company hard. “The optimism we felt for 2009 quickly dissipated,” he commented.

However he added that the company had been rearranged in 2010. “[We] are hopeful that the measures we have taken will restore the company to a more satisfactory return to shareholders.”

The company said that in addition to focusing on the core market for each business line, it was exploring expansion into new regions and countries, continuing development of the underwriting market, expansion of its producing broker panel and diversification of its product range.

Besso is also sees continuing broker consolidation, which it views as an opportunity to increase its business through the acquisition of teams and businesses.

The company expects revenue in 2010 to be similar to 2009 levels, but is hopeful of growth in its international and marine portfolios.