Sharp rise in dealing before profits warning
Sharp rise in dealing before profits warning
Insurance Times has discovered that 4,688,877 shares in Independent Insurance were traded on February 7 2001 – the day before the profits warning. That is an increase of 2.8 million on the volume of shares traded on the previous day, when 1,874,261 shares were traded.
On February 5, the volume of shares traded was less than 200,000. This followed trading at negligible levels for nearly a month.
The surge in dealing in the two days before the profits warning is a matter for concern, as it might suggest insider dealing. Insurance Times has brought these figures to the attention of the Serious Fraud Office.
Separate ledger alleged
Independent Insurance employees from Cheadle are alleging that a second claims ledger was held separately from the main computerised claims ledger.
The existence of a second ledger, if true, could support allegations that the company was involved in fraudulent claims processing, and would be of interest to the Serious Fraud Office.
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The Auditing Practices Board (APB) has attacked financial reporting by UK companies, as the spotlight falls on auditors in the wake of Independent Insurance's liquidation.
The APB issued a consultation paper on aggressive earnings management on Monday, in which it said recent improvements in corporate governance and auditing standards might be undermined by the increasing commercial pressure on those responsible for preparing financial reports.
APB chairman Ian Plaistowe said the trend had come from the US and became more common as economic conditions got tougher.
One of the signs of aggressive earnings management is minimum reserving for debts.
A broker has raised concerns about the status of premium finance contracts used to buy cover from Independent Insurance following the insurer's slide into voluntary liquidation.
The broker said his local trading standards department had told him his clients would be able to claim against any premium finance company if Independent was unable to honour a premium finance agreement under the Consumer Credit Act 1974. However, the act does not apply to limited companies or agreements of more than £25,000.
Ecclesiastical offers EDI
Ecclesiastical will offer brokers full-cycle electronic data interchange for its Classic Online householder policy.
Misys has added renewals to its new business and mid-term adjustment facilities, following a successful pilot.
Intermediary operations manager Joe Gray said Ecclesiastical was especially pleased to be the second insurer to offer EDI through Misys.
The company has also introduced a new support system to help brokers who use the system, including administration guides, a dedicated telephone help desk and an email address for any queries. Emailing EDI_Department@eigmail.com promises a same-day response.
LLOYD'S broker PYV has launched a guide for solicitors on professional indemnity (PI) insurance.
The guide, which will be distributed to more than 9,000 practices in England and Wales, answers common questions on PI. PYV director Michael Rendell said the guide also tackled some of the more complex PI issues affecting merging practices, sole practitioners, partners and locums.
PYV specialises in PI and already has more than 3,000 PI clients.
Stirling work for risky business
STIRLING Cooke Brown Insurance Brokers (SCBIB) has formed a new special risks division to target business in the London Market.
Kevin Flynn and Andrew Anthony, formerly from Alexander Forbes Risk Services UK, will be heading up the team of specialist brokers at the London-based reinsurance intermediary. They previously spent ten years working in the residual value and warranty industry.
The new sector will place insurance and reinsurance programs involving warranty, residual value and related coverages, mainly on behalf of leasing companies.
Anthony McCallum, managing director of SCBIB, said: “The division is a significant first step in the implementation of our strategy to rebuild our London intermediary operation by developing niches built around specialised expertise.”
Go faster – Zurich go tech
ZURICH UK Commercial has opened three small business centres to improve service levels for brokers.
The insurer promises to deliver experienced underwriting teams using state-of-the-art contact management software to provide a speedier, expert response.
The benefits offered by the commercial broker include: a single low-call telephone number across all three small business centres; quotes issued within seven minutes for 90% of telephone requests; policy documentation issued within 48 hours of quotation; opening hours from 9am to 6pm Monday to Friday; hi-tech telephone system optimising the service link between small business centres; and Zurich's branch-based trading teams.
Agency renews its UK links
COLCHESTER-based Agency Underwriting has renewed its main property contract with Leeds-based UK Insurance. Agency took its business away from Lloyd's last year, saying it intended to stay with he company market for the foreseeable future and was looking to build on foundations established over the last year. The new deal runs up to July 2002.