Financial news in brief

Run-off sector in jeopardy

Run-off service providers catering for the London market have been forced to diversify as long-tail business has fallen away, according to KPMG’s annual UK run-off survey. It found the composition of the London run-off market is changing, with old long-tail liabilities such as asbestos replaced by shorter-tail claims. KPMG restructuring insurance solutions director Darryl Ashbourne said: “A lot of good skills in the run-off market could be applied to the live market.” The KPMG survey found that the value of UK run-off liabilities fell 21% in 2009, but that there are still opportunities for run-off service providers beyond the UK.

HSB engineering profit up

HSB Engineering Insurance’s profit rose 61% in 2009 despite a slump in gross written premium and underwriting result in its continuing UK business (HSB’s UK large risks book is in run-off). The firm’s profit after tax was £16.3m in 2009 compared with £10.1m in 2008. GWP rose 1.7% to £103.4m, while claims incurred fell 8% to £28.5m. The GWP boost was driven by growth in HSB’s Canadian operations. The same figure for the UK’s continuing operations fell 4.5%, following a fall in its financial institutions equipment breakdown book.