Commercial claims payments by Jordanian firm thought to be outstanding by £700,000
Brokers have expressed concern over delays to claims payments by Arab German Insurance (AGI), a Jordan-based company which ceased writing new business in the UK in October 2004.
One broker who wrote business through AGI said he believed there was as much as £700,000 outstanding in payments on agreed claims.
AGI wrote property damage and public liability cover for small commercial risks, including hotels and guesthouses and fish-and-chip shops. UK risks underwritten by AGI are handled via a branch office in Limassol, Cyprus, subject to Cypriot (EU) regulation.
IIB director general Andrew Paddick said he had been contacted by brokers who were worried about late payments.
"At the moment we don't know what is happening," he said. "It's conceivable that if there was a large public liability claim on AGI, there would be enormous problems."
Paddick urged firms to conduct due diligence when working with offshore insurers.
Steve Shepherd, partner at Adjusting Associates, the UK firm appointed by AGI to handle claims, said there is a backlog of "a couple of months" on paying claims.
"There is a delay in paying claims and has been since the beginning of the year," said Shepherd. "[AGI] have promised to honour their commitments in the UK. But we have not had any indication as to when they will be paid."
Grant Ellis, chief executive of Broker Network, which has a small account with AGI, said the progress of claims payment was "very slow".
Arab German Insurance could not be contacted at the time of going to press.