Equity Insurance, which currently covers more than a quarter of all the motorcycles and scooters on British roads through its Equity Red Star underwriting syndicate — the largest motor insurer on the Lloyd’s of London market — is to implement a restructure across all areas of its operations.
At the behest of its new parent, US investment firm Aquiline Capital Partners, Equity is preparing to close down or sell substantial parts of the business, eliminating non-core sectors and reducing the value of premiums written by at least a third as it urgently seeks a return to profitability. The company will also concentrate on specialist sectors like classic bike and car cover in the future and limit its overall provision to customers domiciled in particular (ie lower-risk) postcodes.
Aquiline recently completed the acquisition of Equity from Insurance Australia Group (IAG) for a mere £87m — 30 per cent below its book price and reportedly about a tenth of what IAG had originally paid for it — following heavy losses exceeding £150m last year. These were due to Equity’s failure to set aside sufficient reserves to cope with a major upswing in injury claims.
Equity presently employs more than a thousand staff at sites in London, Colchester, Brentwood and Swansea. But this headcount is expected to drop significantly as a result of the operational review.