Fears PRI takeover may see PI capacity shrink
Brokers reacted with dismay after Brit won its takeover battle of specialist liability insurer PRI.
Mike Dickson, marketing director of professional indemnity specialist broker Dickson Manchester, was worried the deal could cut capacity in the PI market.
"The sceptic thinks Brit is going for PRI's capacity rather than its people and, therefore, it would be a loss to the PI market. A lot of the capacity could be used for writing business other than PI."
As a minor user of PRI, Dickson Manchester was unlikely to be harmed.
Marrs Insurance Brokers managing director Mark Coffer said: "Anything that consolidates the PI market is bad, there's no doubt about it. The more players there are, the more chance we have of meeting our clients' needs."
The PRI board last week gave in to shareholder pressure and threw its weight behind Brit's approach.
Brit had already won over 58% of PRI's shareholders.
PRI will recommend the rest accept a deal informally outlined by Brit.
Talks with a rival bidder, rumoured in the industry to be Wellington, fell through on Thursday.
PRI said in a statement: "In light of the significant support from PRI shareholders for the offer from Brit and in the absence of any higher competing offer having been forthcoming, the board is intending to recommend Brit's offer."
Brit is now expected to make a formal offer of about 120p a share for PRI's entire stock.