'Rights of Light' cover helps boost Clear Insurance's profits by 42%

Non-standard insurance policies, acquisitions and a benign claims year helped Clear Insurance Management boost its profits before tax by 42%.

The broker’s profits were £1.63m last year, up from £1.15m in 2012, while turnover grew by 17.8% to £8.6m (2012: £7.3m).

Some £268,000 of the profit improvement was a result of bonus commission it received from insurers for exceptional profits that were made on books of business, following a benign year for claims, accounts filed at Companies House revealed.

Rights of light boosts growth

The broker’s acquisition of north-London broker Steveni Kessler in February 2013 accounted for 5% of turnover growth. Meanwhile, 10% organic growth was boosted by the performance of its legal indemnity business, which offers specialist cover to lawyers, surveyors and property developers.

One of those specialists covers is its ‘rights of light’ policy which offers protection to developers against claims from neighbouring commercial properties over light deprivation.

Clear Insurance chief executive Howard Lickens told Insurance Times: “Right of lights is a quirky sort of insurance. It is normally for property owners or developers who are trying to insure against contingencies and unexpected events, which is a way to protect their profits.”

The broker offers a range of other non-standard products including protection against title covenant disputes and schemes for market traders, tree surgeons and barristers.

Floods to slow down growth

Despite the positive results, Lickens said he expected the broker’s pace of growth to slow and profits to reduce. This is because of an expected reduction in the annual bonus commission income and investment in the new City of London office which opened last month.

The broker also has a large portfolio of commercial properties in the South West - an area that was badly affected by the December floods.

“A couple of decent-sized claims can knock you off where you want to be. We are in the risk business and however brilliant your clients may be – sometimes there will be nasty losses. Hence, while we regularly get good profit shares we try not to budget for them,” Lickens said.

New City offices primed for acquisitions and recruitment

Lickens said he was confident that Clear could grow its turnover by 12%-15% by making more acquisitions and recruiting top talent for its new office.

“When you are in the centre of town, the catchment for acquisitions is pretty much anything inside M25. It just gives us a footprint and coverage that is massively bigger,” he said.

Clear is now poised to buy a broker and is in advanced negotiations with two others, Lickens added.