Groupama swallows bitter pill of euro pain

It’s official: as we predicted at the end of last year, Groupama has called it a day in the UK.

There should be little Schadenfreude in the market: the UK business has been caught up in a maelstrom not of its own making. Though arguably not a spectacular performer, it was solid, well managed, holding its place in the market, and providing brokers with some genuine choice.

Brokers are already reviewing their accounts in the face of the continued uncertainty, and if Groupama goes to a trade buyer or is asset stripped, they will be left with one less option. Ultimately, the client loses.

It’s a bitter pill, too, for Groupama’s UK management – François-Xavier Boisseau and Laurent Matras – and no fault of their own. Given that they’re both well acclimatised to this side of the Channel, they’re likely to pop up at rival insurers sometime soon.

Whether those rival insurers will be interested in a trade sale is less certain. RSA is the hot tip to make a play for Groupama, but privately insurers are saying that they reckon they can pick up the accounts without going to all the bother and expense of buying and then integrating the actual business.

Private equity will take a look no doubt, but a management buy-out is very unlikely. Ultimately, any buyer will only bother in the current economy if they reckon they’re picking up a real bargain. FXB is taking a strong line on price in his public comments this week, but that line will be difficult
to hold.

The broking businesses are a different story, however. Bought in 2007 and never integrated, they will be easy to spin out of the main business.

Expect the Lark and Bollington management teams to front MBOs, and Carole Nash to be snapped up by a big personal lines broker.