Last year’s figures don’t bode well, but the real test for the RBSI-owned insurer will be the 2011 results
On the face of it, there was more bad news for NIG this week with our revelation that it made a loss of £78.8m in 2010. It’s one more negative headline that the insurer could have done without. After a torrid two years, it has attempted to put the past behind it, with a broker club, a string of new products and a shiny new logo.
But, for better or worse, NIG acts as a kind of magnet for attention across the market. Witness the furore over its withdrawal from the personal lines market last July, and the howls of outrage over its ‘Guaranteed to Beat’ promotion.
So it’s no surprise that the “NIG should be sold off” line has reared up again. Greenwood and co may insist that NIG is staying put, but the market will never be convinced. After all, any business is for sale at the right price, isn’t it?
Greenwood took a lot of tough decisions last year. As well as the withdrawal from personal lines, he changed the commercial underwriting footprint – pulling out of unprofitable taxi business, for example. The effect of these decisions has yet to be felt in NIG’s results. Couple that with marketwide phenomena, such as bodily injury hitting commercial motor and the weather events at the end of last year, and an £80m loss begins to look far from catastrophic.
The proof will be in the 2011 figures. If NIG has returned to an underwriting profit, then Greenwood is on the road to success. The half-year results are due soon – judgment on NIG is suspended until then.
n David Ross is making his mark on the regional market, tackling one of its biggest beasts with this week’s raid on Towergate. Where next for the unstoppable Gallagher juggernaut? If Ross’s ambitions to become a power player in UK broking are to be realised, he is unlikely to stop at the acquisition of Heath. Where might his eye fall next?
Oval might not be a bad place to start.