Consultancy admits it has no competitive advantage in non-life run-off

Loss adjuster and consultancy Charles Taylor Consulting has stopped buying non-life run-off businesses after making losses in the area in 2011.

“The market for the acquisition of closed non-life insurance businesses is highly competitive. Further, we do not appear to have any competitive ownership advantages over other market participants,” Charles Taylor’s new chief executive David Marock said in a statement accompanying Charles Taylor’s 2011 results. “As a result we have decided not to acquire further non-life businesses.

He added: “We do, however, believe that we have a competitive advantage in acquiring and operating niche offshore life run-off businesses, thereby creating value for the group, and we will to continue to seek out such opportunities.

While total run-off business only accounted for 3.5% of Charles Taylor’s total revenues in 2011, the business caused group profit after tax to halve to £4.6m in 2011 (2010: £10.6m).

The company attributed the sharp profit drop to “the non-reoccurrence of the large run-off profits generated in 2010.” The non-recurring profits were mainly generated from the release of reserves from a book of UK taxi business Charles Taylor acquired in 2008.

The run-off business as a whole made an operating loss of £700,000 in 2011, compared with a profit of £5.4m in 2010. Revenues from run-off were £3.6m in 2011 (2010: £3.8m).

While the run-off book made a large dent in profits, Marock pointed out that a lot of the pain was absorbed by non-controlling interests of the group. Profits attributable to Charles Taylor’s shareholders were £5.1m, only 23% down on 2010’s £6.7m.

Overall, Charles Taylor’s revenues were up 3.4% to £102.5m (£99.1m) This was mainly driven by a 6% growth in Charles Taylor’s loss adjusting revenue to £50m (2010: £47m). The loss adjusting business accounts for 49% of Charles Taylor’s total revenue.

Despite the steep profit decline, Charles Taylor chairman Rupert Robson was upbeat about the company’s future. “2011 was a watershed year for Charles Taylor. We welcomed David Marock, our new group chief executive officer, to the business in July and he has made an immediate, positive impact.”

He added: “David initiated a thorough business review and planning process to identify and capture profitable growth by building on the group’s strong fundamentals. The new strategy is already delivering benefits.”


Charles Taylor Consulting 2011 results in £m (compared with 2010)

  • Total revenue: 102.5 (99.1)
  • Run-off operating result: -0.7 (+5.4)
  • Administrative expenses: 90.4 (87.3)
  • Profit before tax: 6.4 (12.5)
  • Profit after tax: 4.6 (10.6)
  • Profit attributable to Charles Taylor owners: 5.1 (6.7)