NIG has sold the renewal rights to most of its troubled Special Risks division to UK Underwriting, a subsidiary of the Primary Group, for an undisclosed sum.
As revealed exclusively by Insurance Times on 2 October, NIG planned to put its Special Risks division into run-off at the end of 2003 after failing to find a buyer. But UK Underwriting made a surprise last minute bid. The deal does not include any of NIG Special Risks' liabilities.
UK Underwriting managing director Paul Smith said it was interested in pursuing renewals for the creditor, mechanical warranty and legal expenses parts of the NIG Special Risks portfolio.
"We have an existing book of creditor and warranty business and we would see their book of business as being complementary," he said.
Smith said that between 50% and 75% of NIG Special Risks' income came from selling motor vehicle and related warranties through Warranty Holdings, owned by Ford, and UK Underwriting hoped to continue this relationship.
UK Underwriting does not have a large legal expenses business, and Smith said it was "unlikely" to pursue after-the-event legal expenses business, such as that sold by The Accident Group, to which NIG Special Risks has a large exposure, and would instead focus on before-the-event business.