Quoted Lloyd’s insurer Hardy has confirmed the widespread market rumours of sizeable Thai flooding loss exposures and put itself up for sale.
The announcement follows significant share price drift – down 16 percent in the last month to close yesterday (30 November) at 186p on the London Stock Exchange – and comes a year after the firm rebuffed an offer almost twice that at 350p per share from rival Beazley.
Hardy is thought to have significant reinsurance exposure to Tokio Marine, the largest exposed commercial P&C insurer to the Thai floods, according to sources.
In a statement, Hardy said that it has “received several preliminary expressions of interest in its business”.
The insurer continued: “In view of this, and in the light of the incidence and size of catastrophe events in 2011, the Board has concluded that it should undertake a strategic review; this review will include consideration of whether shareholder value might best be maximised and business opportunity might be enhanced by finding a buyer or strategic partner”.
The firm said its net loss after reinsurance to the floods was in the range of £10mn-£25mn.
The firm reassured investors by saying it has “sufficient liquidity and capital to absorb these losses from Thailand and funds have been lodged at Lloyd’s to support the 2012 year of account business plan”.
Providing QS reinsurance capital for 2012 is Middle Eastern insurance group Arig and US firm Tower
Source : Insurance Insider