Cox, a Lloyd's of London insurer, announced it was winding down its commercial insurance business yesterday due to heavy losses sustained chiefly by the attacks on the World Trade Centre.
Cox, a Lloyd's of London insurer, is winding down its commercial insurance business due to heavy losses sustained chiefly by the attacks on the World Trade Centre. Its shares fell 23 per cent to 36p.
The company will put £100m of commercial business in the Lloyd's market into run off either this year or next. Its property and reinsurance business will be immediately wound down and its nuclear and aviation business will cease from next year.
Cox has issued two profits warnings since 11 September, and raised its estimate of losses stemming from the disaster from £42m to up to £125m.
Michael Dawson, Cox's chief executive, said the commercial business had performed "appallingly". "But this has been average, we are just not prepared to accept that," he said.
One analyst said: "Most insurers have suffered from the terror attacks, but the quality of Cox's underwriting has not been good."
The insurer plans to move forward by focusing on its £600m personal lines business, made up chiefly of motor insurance.
Mr Dawson said the company would announce plans to raise money to finance the expansion of personal lines when it announces full-year results in the next three weeks.
"We are fully solvent and the new capital will not be used to cover losses in our commercial lines," Mr Dawson said. Cox is not leaving Lloyd's altogether as that is where its personal lines business is underwritten.
Cox's motor business has been much more successful than its commercial business, returning a profit in each of the last 42 years and trebling its premiums in the past four years.Reuse content