Lloyd’s insurers turn to third parties to continue buy-backs

Some UK-listed Lloyd’s insurers are continuing their share buy-back programmes in the run-up to the announcement of their full-year results.

Listing rules preclude companies from trading in their own shares in the 60 days prior to the announcement of their interim full-year results, known as the close period. However, they can do so if the scheme is administered by an independent third party over the period.

Hardy, whose close period began on 3 January, has entered into an agreement with stockbroker KBC Peel Hunt to continue its share buy-back programme until the announcement of its results on 3 March or the programme’s completion.

Hardy revealed its intention to buy back up to 2.7 million shares on 26 November, following the collapse of merger talks with fellow Lloyd’s insurer Beazley. It made its first purchase under the programme on 15 December.

Under the agreement, Peel Hunt will acquire no more than 100,000 shares a day at a maximum price of 275p a share. The acquired shares will be held in treasury.

Hiscox has entered a similar agreement with an undisclosed party to buy back its own shares between 4 January and 27 February.

In accordance with the listing rules, the maximum price paid for the shares will be no more than 105% of the average middle market closing price of Hiscox’s shares for the five dealing days preceding the date of purchase.

A number of insurance and reinsurance companies within Lloyd’s and globally have been buying back shares and paying special dividends in a bid to return surplus capital to shareholders and improve returns on equity.