Royal & Sunalliance (R&SA) will take on more than 250,000 of Independent Insurance's personal lines customers, comprising its entire portfolio of council tenants' household contents policies, said to be worth more than £20m.
The deal, hammered out last Friday by R&SA, brokers Marsh and Aon, and liquidators PricewaterhouseCoopers (PWC), is still to be approved by the Policyholders Protection Board.
The agreement will take effect from June 17, the day Independent went into liquidation, and although no payment is involved in the transfer, PWC will pay R&SA a fee to administer claims arising from the policies.
R&SA will also administer all the personal claims that were notified before June 17 for the remainder of Independent's schemes business.
R&SA UK chief executive Paul Spencer said the company would employ a number of Independent staff who had administered the policies.
He said R&SA had acted responsibly during a difficult time for the industry, but also that the agreement made good financial sense. “This is good, solid business with a proven track record of profitability,” he said.
Aon and Marsh released a joint statement, saying they were delighted to provide continuity of cover with one of their major insurer partners.
Liquidator Dan Schwarzmann, a partner at PWC, said the deal was a “very significant move forward in our quest to find solutions to the Independent collapse”.
The business had come close to going to Euclidian Underwriting, after talks with Independent two weeks ago. The integrated Lloyd's vehicle was approached by Independent because the scheme fitted Euclidian's portfolio.
But Aon and Marsh scuppered the deal because they wanted to place their policyholders through existing carriers.
On June 1, however, Jardine Lloyd Thompson (JLT) picked Euclidian to replace Independent as the lead insurer for its caravan chalet and home park scheme Compass.
JLT corporate risks managing director Adrian Girling said, given the recent demise of Independent, he was pleased the account had been transferred.
Compass insures 3,000 holiday parks in the UK.