Lombard to raise pounds 16m in flotation

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The Independent Online
LOMBARD Insurance, which is seeking to raise pounds 16m in a stock market flotation, paid about pounds 200,000 in commission last year to an insurance brokerage run by the managing director's brother, writes Paul Durman.

Lombard's pathfinder prospectus, published yesterday, shows that the insurer received pounds 1.1m of premium income from the Sittingbourne firm of Capital and County Insurance Associates, where Richard Laing is a partner. His brother Andrew is Lombard's managing director.

All business between Lombard and Capital and County is on an arm's length basis, the prospectus said. John Clench, the insurer's operations director, said the relationship with the firm pre-dated Mr Laing's appointment as managing director.

Lombard, a non-life insurer and the subject of a pounds 32m management buyout only last May, is forecasting a pre-tax profit for the year to 30 June of pounds 8.65m, including an underwriting profit of pounds 5.75m.

If the insurer had received the flotation cash last July, it would be heading for a profit of pounds 9.45m.

The Department of Trade and Industry imposed some restrictions on Lombard's premium growth and investment freedom at the time of the buyout.

The insurer said these would not have an adverse effect.