Charles Taylor’s adjusting unit still hurting from claims drop

Consulting and loss adjusting firm Charles Taylor said its loss adjusting business continued to face pressure in the third quarter of 2012 from a fall in large and complex claims.

However, the company’s run-off business, which recently agreed to buy Global Life Assurance, is “performing strongly.”

Charles Taylor reported at the half-year stage that its adjusting business delivered a poorer result because of an “unusual and significant” fall in the number of larger, more complex insured energy losses and that the full-year result would be dependent on the incidence of insured events.

The company said in its third-quarter interim management statement that the overall level of claims instructions remains “sound”. However, it added: “The reduction in large and complex claims has affected revenue. Costs are up on prior year, mainly owing to investment in the business through new staff and offices to broaden and strengthen our capabilities. As a consequence, the business’s performance is behind on both the prior year and the company’s expectations.”

The run-off business, however, is performing in line with expectations, Charles Taylor said. It completed the transfer of Alico, an Isle of Man-based life insurer on 31 October, which it said would allow cash in excess of the amount paid for the company to be released.

Last Monday, the division announced its intention to buy another life insurer in run-off:  Global Life Assurance.

Charles Taylor also said its management services unit, which provides management functions to mutual insurers is performing ahead of expectations.

However, it added that performance in insurance support services was flat.

Commenting on the performance overall, Charles Taylor chief executive David Marock said: “Charles Taylor’s performance demonstrates the benefits of our diversified business model. The group continues to deliver solid profits despite the unusual market-wide fall in the number of larger, more complex insured energy losses for our adjusters. We continue to make progress in delivering our business strategy and our initiative to drive down the Group’s debt.”