Daily briefing: Monday - It's anyone's game

All eyes were on the legal sector today, as it continues its shakedown in preparation for the Tesco Law, more property known as Alternative Business Structures, or ABS.

The new law, which will allow non-lawyers to own all or part of law firms, has just been delayed until the end of the year. Nevertheless, its effect is already being felt.

Today, we report speculation that Plexus, one of the biggest law firms in the insurance space, could sell a stake to a private equity backer.

We also report that Clyde & Co and Barlow Lyde & Gilbert are plotting a merger, hot on the heels of Beachcroft and Davies Arnold Cooper. These two deals would create the UK’s largest and second-largest insurance law practices, respectively.

This flurry of activity is only just the start. When the ownership of law firms is opened up to all comers, high-powered third parties such as retailers are expected to acquire or start up their own legal businesses (hence the 'Tesco Law' nickname). General insurers are also expected to run the rule over law firms, though the current limbo over the future of referral fees could delay if not derail this process.

All in all, there will be a lot more competition in the legal space, and size will matter.

Silver lining for Hiscox

Hiscox kicked off the half year reporting season today with a set of results severely impacted by the recent string of catastrophes, including earthquakes in New Zealand and Japan, the Australian floods and the worst tornadoes on record in the USA.

Hiscox’s £87m loss compares to a £78.6m profit in the same period last year, while its combined operating ratio has deteriorated to 116.9%.

But Hiscox will not be alone in feeling this pain and, as chairman Robert Hiscox points, it has planned for such events by building a retail presence in the UK in the name of diversification. This has had a record period, with profit before tax of £25.2m, up from £15.6m year-on-year, and a COR of 87.9%.