QBE Insurance Group signed a heads of agreement to acquire the Ensign motor business. Ensign motor was previously part of Limit, prior to its purchase by QBE in August 2000.
Ensign motor operates principally through Syndicate 980, under the leadership of John Neal. The acquisition does not involve the Ensign property and aviation business, Syndicate 318.
Ensign currently writes approximately £200m of gross premium, predominately made up of motor business in the UK, with a small overseas account. The underwriting for 2003 is divided almost equally between Syndicate 980 and a co-insurance arrangement with Munich Re.
QBE said Ensign was expected to generate strong returns from recent underwriting years with the published mid-range forecasts for Syndicate 980 on the standard Lloyd's basis for the 2001 and 2002 underwriting accounts at 15% and 12.5% respectively.
QBE is negotiating terms with the principle capital providers for a Syndicate cessation, and to end their involvement with effect from 31 December 2004. It said this planned exit from Lloyd's was in accordance with Ensign's previously disclosed strategy for a transfer of business to an insurer outside Lloyd's.
QBE chief executive and Limit chairman Frank O'Halloran said: "It is our intention to expand and diversify the Ensign business within QBE and to support John Neal's aspirations to create a significant commercial retail division over the coming years.
"The Ensign brand will be retained and growth will be based on Ensign's well established distribution network."
