Staff turnover up, insurer annual results down

The 2010 National Management Salary Survey, published by the Chartered Management Institute and Xpert HR, revealed a labour turnover rate of 13.6%, up from 12.4% in 2009.

Resignations in the insurance sector stand at 6.2%, compared to 4.1% twelve months ago: the average is 4.7%.

The survey results show that employers are failing to persuade staff to stay, with requests for internal transfers as an alternative to leaving resting at 3.4% for the sector against a national average of 3.6%. Ruth Spellman, chief executive at the CMI, said that, "money isn't the main motivator anymore. Instead, employers must concentrate on building remuneration packages that incorporate earnings with development opportunities, offer flexible approaches to work and recognition of the need to better engage with staff."

There was an average salary increase of 2.7% in the insurance sector compared to a national average of 2.5%.

Increased ratio

Meanwhile, in corporate results, Axa's UK and Ireland earnings were hit significantly by £157m of general insurance losses, increasing the combined ratio in general insurance and healthcare from 99% in 2008 to 102.2% in 2009. Axa suffered especially as a result of flooding in Cumbria in November. Also, having moved out of managing general agencies, commercial lines revenues were down 15%, with liability down 24%, commercial motor down 11% and property down 12%.

Fellow French insurer Groupama also reported a difficult 2009, with profits diving from £30.1m in 2008 to £14.1m, which includes figures for brokers Carole Nash, Bollington and Lark. Total revenues at the insurer increased 3.9% to £450.3m of gross written premium, with the group's brokers producing £66.5m of revenues (2008: £66.4m). Francois-Xavier Boisseau, chief executive officer at Groupama, hailed a solid performance in household, healthcare, motorcycle and small fleet and said that market conditions are improving.

At Zurich, operating profit for its UK general insurance operation fell from £295m (2008) to £146m in 2009, with GWP falling from £2.1bn to £2.03bn; its combined operating ratio was 100.1% compared to 97.8% in 2008. Zurich has announced that it will increase its personal lines motor rates by 20% in March. Meanwhile, Catlin has increased its regional presence, with 40% of its underwriting contribution coming from non-London underwriting hubs.

Celebrating 40 years in business this year, Perkins Slade is the latest broker to be awarded chartered status by the Chartered Insurance Institute.

There has been some purchasing activity this month. Peter Wood has taken control of Esure, having bought Lloyds' 70% stake with funding from a management buyout vehicle backed by Penta Capital to add to his existing 30%. It is reported that he paid cash "slightly" in excess of book value (31 December 2008: £185m).

MGA Ink's founders Keith Syrett and Philip Thomas have set up MGA Thames Underwriting to tap the contractors' market. Backed by an A-rated UK general insurer, the MGA will target employers' liability and professional indemnity, including low excesses, non-standard and highly regulated areas such as manufacturing.

Mike Smith will take the position of managing director of Ink from March. Confirming the move, a spokeswoman for Giles said: "Compromise agreements have been agreed with Keith and Phil and we are pleased that Phil will be acting as a consultant to Giles."

Blackham returns

Chris Blackham, founder of Layton Blackham, which was sold to Axa in 2007, has returned to insurance as a non-executive director of London-based Howden Insurance Brokers, which grew its broking revenue 41% last year.

John Charcol has been added to the list of companies that entrepreneur and Towergate executive chairman Peter Cullum has bought. The mortgage broker will become part of Towergate's independent financial adviser firm Towergate Financial, having been snapped up for a nominal fee a matter of days after it went into administration on 22 February. Ian Darby, chief executive officer at Towergate Financial, is former managing director at John Charcol, which was hammered in the mortgage market implosion of the last two years.

Meanwhile, Towergate is consolidating its businesses near Manchester by opening an office in Heaton Mersey. The former Broker Network Insurance Brokers' businesses based in Altrincham, Wilmslow and Tottington will be merged at the site.