'Margins were too slim to be sustainable long-term,' says Chartis's Shea
Chartis is the latest insurer to withdraw from private motor by putting its book into run-off.
Chartis stopped accepting renewals from brokers last month. It also has a “very small” pipeline of direct motor and household, which is being put into run-off.
The insurer will continue to underwrite some private motor for high net worth individuals, as part of its private client group.
UK chief executive James Shea was relaxed about the decision, adding that the company’s motor market share was “very low”.
He said: “In the general marketplace, our market share was very low. Our view of the industry was that it was going to be very difficult to make a profit and it was probably best to exit.
“I think you need to have scale and a different distribution platform than what we have. If you look at Chartis globally, we have the expertise internally to do very well and exceed markets in all of them.
“In many of them, we do; Japan is a great example. But in the UK market, based on where we are today, the margins were too slim and we did not believe it was a business where we could have a long-term sustainable business.”
Elsewhere in the motor market, Canopius has closed the Chelmsford claims office of its specialist motor insurer acquisition, KGM Underwriting Agencies, making all 12 staff redundant.
All claims dealt with at the KGM Chelmsford branch have been moved to KGM South Woodford office.
KGM, which manages Lloyd’s Syndicate 260, was bought by Canopius in July. The deal also included approximately 60% of Syndicate 260’s capacity.
Canopius chairman Michael Watson said at the time that the acquisition would help KGM take advantage of the rapid rise in UK motor rates, although he admitted the business would need to be scaled back to ensure profitability.
Watson said in August that KGM premiums this year would be around 30% less than in 2009.
A Canopius spokesman said: “As part of our drive to improve claims handling for our customers and brokers, KGM has decided to transfer certain claims handling responsibilities from Chelmsford to South Woodford. As a consequence, the Chelmsford office has closed.”