Utley was the shareholder's scalp, says Elliot Lane
Neil Utley's abrupt departure from Cox Insurance last week has resurrected the spectre of the failed Highway deal in April plus the state of the insurer's reserves.
After £2m was spent on due diligence and then no deal, shareholders wanted a scalp. It seems they got it. Non-executive chairman Peter Owen said the board decided, after five and half years under Utley, that it "wanted to refresh the management team going forward". It seems Utley did not have the "sufficient toolkit" to carry the company further.
Owen has decided to return to his non-executive chairman role and will not be as hands-on as before. Two institutional investors now have 35% control of the company and sit on the board. It was all about administrative "neatness", making sure Cox had a group chief executive and a non-executive chairman, he added.
Very neat indeed. He would not confirm the supposed crisis meeting that took place on the night of 9 June, but it is likely that this is when the decision was made to shoe-in the institutional investors' man, Andrew Fisher.
John Waples' article in The Sunday Times (13 June) has blown open the state of affairs on the Cox and Highway merger negotiations. Highway got last minute nerves over Cox's alleged under-reserving for future claims. Cox immediately refuted the claims it was under-reserved by £70m saying its actuary Bacon and Woodrow had signed off its reserves and was happy.
But with the board setting a target of pre-tax profit of £65m this year, and the shareprice rocky, Fisher will be looking at consolidation opportunities.
Maybe Highway will buy Cox. Stranger things have happened.