Chairman Watson hopes motor specialist will help it achieve underwriting profitability
Canopius’s acquisition of Lloyd’s underwriter KGM was a tactical decision to take advantage of the rapid rise in UK motor rates, according to chairman Michael Watson.
Canopius snapped up the motor specialist for an undisclosed fee last week from Gibraltar-based parent Perseverance.
He said: “Certainly, rates have been improving in the UK motor marketplace for a while now. I’m of the view they need to go further and will go further. Part of our decision is tactical. While we intend to be in this segment for the long haul, there is always a question of when precisely do you decide to enter it.”
Watson was attracted by the fact that KGM was a specialist motor underwriter, which he believed would help it turn a corner into underwriting profitability.
He said the addition of a motor underwriter would also “round off” the Canopius UK portfolio, which includes SME commercial and personal lines business. The UK retail portfolio would be around £200m gross written premium by the end of 2011.
Perserverance subsidary Optimas, which previously owned KGM along with personal lines broking group One Answer Network, posted a £3.5m loss in 2008.
All the reserving and claims up to 30 June remain the responsibility of Perseverance.