QBE must play Brit card wisely

Nobody knows the price QBE paid but, strategically, the acquisition of Brit’s renewal rights is the perfect fit.
 
But here comes the catch. Brit has a great reputation among brokers. If QBE ramps up rates, sheds too much business or pushes out the Brit management, that will provoke the ire of its intermediaries.
 
QBE has made this mistake before with Evergreen, by pushing up rates and then watching the staff exit.
 
Evergreen was a small property specialist and, in the grand scheme of things, the damage was pretty limited.
 
Brit is a much bigger player and the broker community will be watching closely.
 
To be fair, QBE has so far indicated that the Brit management is staying, and that the Brit book, according to property, casualty and motor chief Ash Bathia, has nothing particularly worrying in it.
 
Indications are that QBE will shed around £50m of Brit’s business, a manageable figure.
 
There are traps out there, but if QBE plays its cards right, it should end up with a great deal that will take it to a £600m premium income player in the regions.

More woes at Equity

More negative news for Equity Red Star, as today it emerges that the company needed a £113m cash boost in 2011. The losses at Equity Red Star were immense, even bearing in mind the problems that other insurers were suffering with bodily injury claims.
 
As we know, there were obviously some management blunders at Equity, such as its admission to Lloyd’s that it carried out ‘reserve reviews’ and subsequent reserve releases without keeping adequate written records and telling its actuaries, Deloitte.
 
You have to wonder if any more skeletons will fall out of the closet.