Motor book ‘unprofitable'
Legal & General (L&G) is to close its unprofitable motor book to concentrate on more profitable lines of business.
The insurer revealed this week it would not be offering renewal terms to its motor policyholders.
Customers will instead be referred to insurer Equity.
An L&G spokesman said the company's motor book had not been performing well recently, having made a loss in 2005,
which was “not sustainable”.
“After a review of the general insurance business we have decided to concentrate on household and healthcare,” the spokesman said.
The insurer said 60 members of staff would be affected by the closure and it was consulting on potential redundancies.
It is believed that many staff are close to retirement age. L&G has a partnership agreement with union Amicus.
L&G's motor book is a relatively small part of the company's insurance business. In 2005, it was worth £32m in
gross written premium, although this is expected to dwindle to £20m by the time the book goes into run-off.
In comparison, the household book was worth £270m GWP in 2005, while the healthcare business was £47m.
Equity Insurance managing director direct John Castagno said he hoped the insurer would pick up the full £20m
of the book. He said the deal was not secured as a result of his connections with L&G. “This was a result of a rigorous tender process,” he said.
Castagno was previously head of L&G's general insurance division.
Castagno said Equity would be looking to do similar deals with insurers that see motor as “non-core” to their