Groupama: what's going on?

Eight months after troubled French insurer Groupama put its UK operations on the market, the first part of the sale has been completed. But there’s still plenty to be resolved.

Yesterday the management team at Lark, which had been owned by Groupama for the past five years, put pen to paper on a buy-out, backed by Hiscox and Lloyds TSB. It had been widely tipped in the market that Lark’s management had aimed to buy back the business from Groupama since the day all its UK operations were put on the block.

And Lark’s chairman Graham Lark said the company was now looking forward to returning to life as an independent broker. Lark management and staff will be relieved that this period of uncertainty is over. The rest of the market will watch with interest how Lark develops without the watchful gaze of a French parent.

However the market is waiting for developments at Groupama’s core underwriting business. As reported by Insurance Times last month, brokers have been pulling back business from Groupama over its ‘junk’ rating status.

The management said it was confident a deal will be struck by the end of the summer, but right now there is no indication what will happen to the business. Brokers have criticised the lack of information on the sale and want an end to the ambiguity that has shrouded the company since the start of the year. Just what is going on?

There’s also Groupama’s two remaining broking business, Bollington and Carole Nash. Bollington has been hotly tipped for a management buy-out backed by private equity house Gresham.

However this is understood to have stalled in recent weeks. Private equity firms are thought to have expressed an interest in buying Carole Nash and Groupama in a combined deal, while former Swinton chief executive Peter Halpin has been linked with a cash-backed bid for the motorcycle broking outfit.