The UK motor business of Chaucer is to be transferred to UK-based insurance provider and conglomerate Markerstudy Group via a 100% reinsurance arrangement for prior-claim liabilities and in-force policies written by the UK motor division, and the sale of the entities associated with the business.
The deal is expected to close in Q3, although it is subject to regulatory approvals and the satisfaction of certain closing conditions. The total consideration is about $60m.
Hanover international operations president and Chaucer CEO Bob Stuchbery said that the UK motor division of Chaucer had "made a solid contribution" to Chaucer's success. It focuses mainly on traditional personal motor and several specialist classes. It generated net premiums of $297.7m in 2014, with a net combined ratio of 100.7% for the calendar year.
Chaucer said that the sale would permit it to "direct all its resources to specialist classes". Chaucer had net written premiums of $1.23bn in 2014, with a combined ratio of 90.0%. Without the motor division, the combined ratio would have been about 87.5%.
Markerstudy is a privately held group of insurers that includes Gibraltar-based Markerstudy Holdings, Markerstudy Insurance Co Ltd and Zenith Insurance. The support section companies are based in the UK, providing distribution, claims and administrative support.
Formed in 2000 by Kevin Spencer and Gary Humphreys (who remain the largest and second-largest shareholders) on the back of a managing general agency formed in 1997, Markerstudy pioneered Gibraltar domiciliation for a UK insurer with UK support companies providing administrative services. It bought Zenith in 2010. Prior to the formation of Markerstudy, Spencer had been managing director of Lloyd's broker Edgar Hamilton & Wellard.
Markerstudy Group also owns a number of non-insurance operations, including One Media & Creative UK, The Brew House Hotel and Next Dimension Gymnastics