Independent Insurance resists takeover approaches

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The Independent Online

Independent Insurance, the general insurer that has just emerged from a period of poor performance, yesterday said it has been approached by interested bidders, but it pledged to remain independent.

Independent Insurance, the general insurer that has just emerged from a period of poor performance, yesterday said it has been approached by interested bidders, but it pledged to remain independent.

This bucks the recent trend in the insurance industry, which has seen major tie-ups between British companies, including the May merger of CGU and Norwich Union to form the UK's largest general insurer.

Michael Bright, chief executive of Independent, valued at £720m, said: "Inevitably representatives of companies ask us, but we don't see what they can do for us. We are going to concentrate on organic growth and drive it very hard."

He said consolidation had helped Independent's cause, as mergers had reduced the number of insurers in some markets for brokers to choose between.

His comments came as Independent reported strong half-year results, signalling an end to its poor profit and volume performances in recent years. The company saw operating profit for the period to 30 June jump 12 per cent to £35.4m. A surge in new business was reflected in the company's 58 per cent rise in gross premiums. But investment returns fell 19.6 per cent to £11.5m, and pre-tax profit was down 22.4 per cent to £29.1m.

Mr Bright anticipated that the upturn in sales volumes and its 6 per cent increase in premium prices would feed through into the results next year.

The company also suffered a setback in its international division, which incurred an underwriting loss of £5.8m as Independent followed CGNU in reporting setbacks in France due to storms and low sales growth. Mr Bright said the French arm "has not been tough enough" but remained confident that the country remained a "great opportunity". The company's new business in Ireland, set up this January, wrote £12.1m of insurance, almost double its target.

Trevor Moss, an analyst at SG Securities, said: "Earnings and investment income were slightly lower than I was looking for, but the basic message is pretty clear - Independent has got itself ready to take on a lot of volume, and now it is."

Independent shares yesterday initially surged 6 per cent, but closed down 7p at 300.5p.

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