Xchanging Insurance Services calms London market fears

Xchanging Insurance Services (XIS) chairman Richard Bucknall has written to several London market heads assuring them its shareholders can buy out Xchanging's 50% stake "in the unlikely event that any shareholder ceases as a going concern".

Bucknall has also assured them that XIS is a separate company and legal entity to troubled outsource provider Xchanging.

In a trading update last week, Xchanging announced a profits warning, goodwill and fair-value impairments, and the departure of chief executive David Andrews.

The letter, sent on Friday and seen by Insurance Times, is addressed to Lloyd's chief executive Richard Ward, LMA chairman Barnabas Hurst-Bannister, International Underwriting Assocation chairman Stephen Riley and London and International Insurance Brokers' Association (LIIBA) chief executive David Hough.

XIS, which is a provider of back office services to the London insurance market, is 50% owned by Xchanging. Lloyd’s owns 25% and the International Underwriting Association owns 25%.

Bucknall also stresses that core intellectual property and systems – such as POSH, LIDS, LORS and CLASS – are owned by XIS.

However, the letter says that the XIS audit committee met with Xchanging’s auditors, PWC, on Thursday, and is satisfied “the cash position is satisfactory”.

Read more in this week's issue of Insurance Times, online Wednesday and in print Thursday.