Troubled insurer cuts back on non-Lloyd's business in London
Trenwick International has put its London-based non-Lloyd's business into run-off.
The move mainly affects its liability business, including cover for latent defects, engineering, warranty, credit and bonds.
Other business, comprising property, cargo and general aviation, is being moved to Trenwick's Lloyd's operation. Commercial property is expected to follow.
Liability insurance made up about 10% of Trenwick International's business, which generated up to £500m of premium income.
The company had been fighting for its future after downgrades by ratings agencies made it less attractive to brokers.
Fitch downgraded Trenwick's long-term rating to CC from CCC on Tuesday afternoon following suspension of dividend payments.
Standard & Poor's (S&P) lowered its preferred stock ratings on the holding group and related entities on Monday to D from CC, also in response to the non-payment of a dividend.
S&P's insurer financial strength rating on London-based Trenwick International is B+, with a negative outlook.
Trenwick's Lloyd's operation has until 6 December to renew its $226m (£144.3m) letter of credit to support next year's underwriting.
There will be 11 redundancies from the company's London offices as a result of the move to run-off the liability business.
Stockbrokers were due to be told on Tuesday as Insurance Times went to press.
Berkshire Hathaway's interest in the group's aviation business, made via its Syndicate 2750, is unchanged. Trenwick International's general aviation business is being moved to its Syndicate 839.
The closure of the liability business will make conditions even harder for brokers working in a difficult market.
Clients with liability insurance underwritten by Trenwick are expected to have difficulties in replacing the cover.
A professional indemnity scheme for IFAs run by Misys was placed with Trenwick at Lloyd's by broker Windsor.
Misys life and pensions marketing director Andrew Bedford said: "Whether by luck or judgment, we are with the Trenwick syndicate at Lloyd's and have no problems there.
"But there will be some IFAs out there who are with Trenwick International."