The chief executive and underwriting director of Goshawk Insurance both resigned yesterday after the insurer was forced to close in London because of fears it is under-reserved.
Their jobs became untenable after Lloyd's of London stepped in to order the closure of Goshawk's syndicate 102. It has endured months of heavy losses, as the insurer of the Columbia space shuttle that crashed in February, and to customers of the personal injury company, The Accident Group, which went into administration this summer.
Chris Fagan has resigned with immediate effect because "there is no longer a significant role for him in the group". Goshawk's underwriting director, Andrew Gammell, said he will leave at the end of the year.
Both would be entitled to payouts of about £1m each, but Mr Fagan has said he will forgo some of his entitlement. Mr Gammell's settlement has yet to be decided.
The management has been under pressure from shareholders following two profits warnings, a £31m interim loss and a 73 per cent fall in its share price in the past year. The company admitted it had moved into insurance markets that it had under-researched, and had not secured adequate reinsurance for the risks it had taken on.
"These guys serve no real purpose in the company any more, but they should have gone months ago. There will have been a lot of pressure from shareholders," one analyst said yesterday.
Andrew Castell, Goshawk's finance director, is staying with the group and will oversee the day-to-day operations of the London syndicate as it is run off. Goshawk employs 75 people in the UK, but no decision has yet been made on the future of their jobs.
Lloyd's will take Syndicate 102 off Goshawk's hands, and Goshawk will focus on its small reinsurance operation in Bermuda. Russell Brooke, who runs the reinsurance arm, will join the board and is likely to take over as chief executive.Reuse content