Cost of reinsurance bill remains unchanged
UK motor insurer Admiral has extended its existing reinsurance partnerships until 2014.
Admiral currently holds UK-based car insurance reinsurance policies with Swiss Re, Hannover Re, Mapfre Re and New Re. The cost remains unchanged.
Shore Capital analyst Eamonn Flanagan said news will be taken well by the market, however analysts remain concerned about bodily injury claims and the threat to the ancillary income line from the Ministry of Justice and OFT investigations.
“Admiral indicated that the cost to the group was unchanged, although no details were provided as to any changes to the profit commission structure. The latter is key to determine whether the attitude of the reinsurers has changed following the recent increase in bodily injury losses within Admiral,” said Flanagan.
Admiral’s chief executive Henry Engelhardt said: “Reinsurance has been at the core of Admiral’s successful business model since 2000 and we look forward to continuing our mutually beneficial relationships with our partners for many years to come.”
Admiral’s new extensions are in addition to the current co-insurance policy agreement it holds with German reinsurer Munich Re, which covers 40% of the UK business until 2016.
Admiral has committed to retain at least 25% of the UK underwriting for the duration of this agreement, whilst the allocation of the balance is at Admiral’s discretion.
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