Biba asks liability market to pick up Underwriter's baton

The British Insurance Brokers' Association was in talks with three of the UK's remaining liability i...

The British Insurance Brokers' Association was in talks with three of the UK's remaining liability insurers, as IA went to press, in an attempt to replace products offered by The Underwriter Insurance Co, which has closed to new business. The Underwriter provides Biba's member scheme for excess public product liability cover via its probroker.co.uk website.

Although no details were available, Biba chief executive Mike Williams said the exclusive scheme, worth under £10m in premium income, had been very popular with members. Biba added that the scheme had recently been expanded to include excess professional-indemnity insurance.

The Underwriter went into solvent run-off in July. It has said it expects to keep its claims team in place for at least four years, although the60-strong workforce is expected to lose the majority of its underwriters.

It is understood some of its construction policies are project-based - hence the four-year timescale.

The company recorded an unaudited loss before tax for 2002 of £21.3m, with a combined ratio of 135.8% on premium income of around £105m. In addition to the probroker.co.uk channel, it distributed through a core of about 50 brokers, with 90% of business placed through the London market.

The Underwriter was set up four years ago with £50m of capital backing from Morgan Stanley Dean Witter, and was fronted by ex-Independent heavyweights Keith Rutter and Robert McCracken. Its non-executive directors included Peter Wood, and former director of Privilege Insurance Frank Kirwan.

Mr Rutter stepped down from The Underwriter in March and was replaced by chief executive Nigel Rogers.

The demise of one of only a handful of insurers writing liability business in the UK - albeit the smallest - highlights the fragile nature of this long-tail sector, which is presently under governmental review.

Zurich and Royal & Sun Alliance both ruled themselves out of picking up the renewal rights for The Underwriter. Market commentators expect the majority of its business will find new carriers at renewal on the open market, despite current capacity problems, but fears have been raised over the future of its casualty book.

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