Four senior managers from KWELM, one of the largest-ever insurance run-offs, have launched a new company to provide services to the fast-growing run-off market.
The new company, trading under the KMS name, will conduct solvent and insolvent run-offs. It will also participate in and manage exit strategies and provide consultancy services to insurance companies especially those seeking significant reductions in their liabilities.
The KMS group management team comprises Mark Langridge, George Clarke, Paul Corver and Richard Finney – all of whom were actively involved in the administration of the $3bn run-off from five insolvent insurers known as KWELM.
The KWELM run-off began in 1992 against a background of great uncertainty surrounding asbestos and pollution claims. There were limited expectations about the ultimate payout and the timescale extended beyond 2015.
In the event, progress and payouts were faster and higher than expected. By the end of 2005, creditors of the five KWELM insurers had received average payments of 88.7%. That compared with the average return of around 40% envisaged when the original scheme of arrangement was launched in 1993.
The new group will handle the residual run-off of the KWELM companies and other insurance run-offs previously conducted by KWELM Management Services.
It is also handling the residual run-off for the Bermuda Fire and Marine (BFMIC) estate where the liquidators have recently announced and paid a distribution of 82% to creditors.
KMS has additionally acquired from KWELM, KMS Insurance Services, which conducted solvent run-off and consultancy work for a number of London Market and overseas businesses.
The UK market alone for non-life run-off liabilities is around £40bn and continues to grow.
