INDEPENDENT INSURANCE WARNS ON PROFIT AS CLAIMS SOAR

UK-based Independent Insurance has warned that its operating profit for 2000 will be about £20m below market expectations, owing to a sharp rise in personal injury claims. The group said that it had been forced to increase its level of stop-loss reinsurance protection for business transacted in the London insurance market, blaming the rise of the “no win, no fee” compensation culture and the success of advertising campaigns by companies such as the UK’s Claims Direct. Chief executive Michael Bright commented that “there are six companies advertising out there, not to mention all the local solicitors’ co-operatives. Litigation is tending to become a matter of addressing quantum rather than responsibility”. Independent Insurance said that profit had also been hit by poor results from its French business, adding that it had imposed management changes and adopted a “more prudent reserving” policy in France. The group said that the “rating environment remains positive” and noted that its gross written premium in 2000 had risen by 64% to £830m.