Managing director John O’Roarke sets out plan to expand the group into the motor market.
Liverpool Victoria (LV=) is set for a massive push in the motor sector after agreeing to acquire Highway Insurance Group for £150m.
LV= will pay 73.35p per share in cash for Highway, as it attempts to become a top five insurer by 2012.
As reported first online at Insurancetimes.co.uk the Highway Group consists of two main operating units: broker-distribution arm Highway Insurance which specialises in personal lines motor business, and Hero Insurance Services, a motor-dominated online broker consisting of several brands.
John O’Roarke, managing director of LV= General Insurance, said the acquisition will complement its existing broking arm, ABC insurance. He said: “We can get much more scale in the personal lines motor business,” he said. “It also takes in commercial motor where we currently don’t have any products in the market. It is all things that we had in our business plan and this simply gets us there quicker.” ABC, a start-up business led by O’Roarke, was acquired by LV= in September 2006 in an attempt to break in to the broker market. He added: “We really only got started with the ABC broker business last year. We want to write about £40m this year and dramatically increase our presence in the broker market which we feel has a very strong future.”
O’Roarke said Hero would be integrated in to the LV group to create a retail broking division. “It has got a number of broker brands in it under Hero, an activity that we don’t currently have in the LV= group.”
He refused to rule out acquiring more businesses in the future. “It is probably early days, but you can never say never. We are going to be quite busy with this particular acquisition in the next few months.”
In its interim results, Highway saw its profits before tax fall to £1.4m for the six months to 30 June 2008, down from £11.8m in the same period last year. Gross written premiums also fell marginly to 130.7m, down from £131.2m. The group's operating ratio improved 98.5%, compared to 100.9% in the six month period last year.
Richard Gamble, chairman of Highway, said: "Although the result for the six months ending 30 June 2008 is disappointing when compared to previous years, we are pleased that our investment managers have protected capital during what has been a period of extreme conditions in financial markets in early 2008.”