Sedgwick ahead after nine months: Difficult market conditions overcome

SEDGWICK GROUP, Britain's largest independent insurance broker, yesterday reported that pre-tax profits had risen from pounds 55.8m to pounds 63.6m in the first nine months of the year despite a sluggish performance in the UK.

Explaining the background to the trading performance, Sax Riley, group chief executive, said that London market conditions remained difficult. Shortage of financial capacity appeared to be the main feature, and this was expected to continue to affect results. 'The decision taken by Lloyd's to admit corporate capital should help to alleviate this in 1994,' he added.

Sedgwick said that encouraging increases in brokerage and fees were achieved by the group's retail insurance operations in the US, Britain and Asia Pacific, by consulting operations worldwide and by Sedgwick Payne in North America. But Sedgwick Payne's results in the UK continued to be affected by lack of capacity in the London market.

Brokerage and fee income and expenses increased by 4 per cent and this, the group said, reflected an improved underlying trend for the third quarter.

This ability to control costs growth impressed analysts, who are predicting that Sedgwick could report pounds 70m for the full year against pounds 58.2m for 1992.

Sedgwick added that it was 'encouraged by the high level of new business which the group has achieved so far this year and expects this trend to continue in 1994'.

Earnings per share for the period were 8.5p compared with 7.8p. The results do not include any contribution from Noble Lowndes, as completion of this acquisition did not take place until 30 September.

'Business plans for the integration of the Noble Lowndes operations with the group's consulting operations are progressing well, and the new business structure will be in place for 1 January 1994,' said Sedgwick.