Daily briefing: Tuesday - Extent of losses revealed

The full horror of Lloyd’s insurer’s motor results were revealed today on insurancetimes.co.uk in a report by Ernst and Young. The report doesn’t paint a pretty picture. IAG-owned Equity Red Star’s troubles in the motor insurance market have been well documented. Plagued by bodily injury claims, IAG UK lost $355m (£220m) in its full year results for the year ended 30 June 2010. The report today shows how Equity’s net combined ratio (NCR) doubled to an incredible 200% in 2010 (100% in 2009). The staggering figures far outweigh the results of its closest rivals. KGM, now owned by Canopius, saw its NCR deteriorate to 160% from 140%. It was a similar story for Jubilee, whose NCR ended up beyond 160% from below 120%. Although claims inflation is falling and premiums are rising, the Lloyd’s motor insurance market still has a battle on its hands to lessen its underwriting losses, despite the report predicting a combined operating ratio of 111% across the market this year.

Report quashes racism concerns

Insurers will be pleased to hear today that a report issued by the Law Society found there to be no evidence of discrimination towards black and minority ethnic (BME) law firms during the 2010 renewal period. Insurers have been accused of this in the past, including last year when Laitan Eyiowuawi – who set up his own practice in London – said no insurer offered cover for his two-man practice by the October deadline. He ended up in the assigned risk pool (ARP) and was eventually offered a £22,000 premium, but hinted that ethnicity may have contributed to his ordeal. However, the report found that only 4.4% of BME firms felt that their ethnicity had an impact on the premium they paid. Encouraging news for insurers and the ABI.

Down on the farm

Interesting to note NIGs play in the agricultural space. The RBS-owned insurer wants to increase its foothold in this sector, but it’s not the only player looking for growth. Yesterday, Rural Insurance, the agricultural insurance arm of UK General, announced ‘aggressive’ growth plans with ambitions of becoming a top five player within five years. And last month, Towergate's agricultural underwriting agency, Towergate AIUA, poached a team of four senior managers from Rural in bid to boost growth. Interesting times indeed for farm insurance.