Tom Flack's take on Spitzer
While it proved a varied week in the UK insurance market, it was two political stories – one expected, the other something of a shock – that reigned supreme in the online space. Though it threw up few surprises, and little that will impact on the sector, the eagerly anticipated release of Alistair Darling’s first Budget on Wednesday dominated the virtual news.
Much more of a shock was the involvement of former New York governor Eliot Spitzer with a prostitute ring, which featured across all UK and global online news sources at the beginning of the week. Four years ago, as attorney general of New York, Spitzer led the investigation that resulted in Marsh paying out fines of $850m for accepting contingent commissions, and insurers being charged with price fixing.
In the wake of the Spitzer’s resignation on Wednesday, a source close to Marsh described Lime Street as “gently smiling”. That was unlikely to remain the case when news broke that the government could be set to introduce the largest changes to Lloyd’s broking structure since the introduction of the Lloyd’s Act two and a half decades ago. Within 48 hours of the news breaking, the story had become the third most popular of the week on insurancetimes.co.uk.
The credit crunch also was afforded its weekly spot in the news, with US equities tumbling after the dollar hit new lows against the yen and the Euro. No less uplifting was a report by Standard & Poor’s that suggested the EU’s implementation of Solvency II in four years’ time would force a quarter of European insurers to either scale back their operations or merge their businesses.
Leading insurers and brokers, meanwhile, continued to deliver a mixed bag of results. The latest batch featured Allianz, which delivered strong top line growth of 9% and Omega, whose profits ballooned by 163% to almost $60m.
The news for Benfield was not so good, however, as its profits fell 7.5% – and its shares by twice that sum after the broker said it expected further decline in 2008.
Residual traffic from AXA’s impending acquisition of SBJ, and Giles’ throwing down of the consolidation gauntlet to its rivals was particularly strong.
The stories now rank second and fourth on the Insurancetimes.co.uk most read list this year.
This week, Giles latest trio of buys was thrown into the mix at number three, while the news that Open GI chief, Phillip Bell, is to stand down, less than six months after the company was bought by Towergate, was met with a predictable flurry of interest.
The most read stories this week on insurancetimes.co.uk:
1. Three charged in cash for crash investigation
Police and IFB crack motor insurance fraud network.
2. Treasury plan to end Lloydâ€™s broker reign
Once in a generation changes to the way Lloydâ€™s is run.
3. Giles buys three more brokers
The consolidator war heats up with more acquisitions by the Scottish broker.
4. Open GI chief to stand down
Software house chief Phil Bell to leave after Towergate takeover.
5. Towergate settles poaching dispute with Chaucer
Peter Cullum declares the integrity of the broker/insurer relationship is restored.