Morrison’s captive offloads

Supermarket Morrison has sold on historic liabilities from its self-insurance programme to Malta-based Grafton Europe, protecting its captive from long-tail health claims, the FT reports.

The deal involves the transfer of tens of millions in reserves from the Morrison’s captive to Grafton. Grafton passes on half the liabilities to National Indemnity, the reinsurance business of Warren Buffett’s Berkshire Hathaway that took on the Equitas liabilities in a deal with Lloyd’s.

Richard Pennycook, Morrison’s chief financial officer, said the deal would free a “significant amount of capital” from Morrison’s own captive insurer. “We can thus create finality on past years’ exposures while continuing to use our self-insurance programme to write new business,” he said.

He added that the company hoped to work with Grafton again in years to come.