NIG exposure in warranty company collapse could be "tens of millions"
NIG could be facing a "tens of millions" hit to its written premiums following the collapse of used car warranty business Oriel Investment Corporation (ORIC), said market sources.
But an NIG spokesman denied the company's exposure was large, saying any estimation of an exposure at the higher end would be "completely wide of the mark".
NIG and AXA, which supported the bulk of the business operated by Warranty Holdings, have confirmed that all valid claims would continue to be met. Neither insurer was implicated in the collapse in any way.
AXA formed a relationship with the Hertfordshire-based company in January to underwrite its 'other products' business, including Guaranteed Asset Protection, Vehicle Replacement, tyre and MOT cover. It is believed the bulk of the warranty business remained in the NIG Special Risks division, currently in run-off.
Market sources said it was not clear whether Warranty Holdings owned the captive insurance companies involved in the warranty business, or if former parent company Ford Motor had retained control, implying that the scale of NIG's exposure was unclear.
The business, which trades as Warranty Holdings, was placed into administration on 25 March after internal investigations revealed "serious business irregularities", said administrator Grant Thornton.
Grant Thornton partner Ipe Jacob said the extent of the irregularities had only come to light very recently, but was believed to involve several million pounds.
Hertfordshire police said they were aware of the situation and were currently conducting initial inquiries.