Business
Admiral Group Plc - Coinsurance and Reinsurance...
Admiral Group Plc - Coinsurance and Reinsurance....
About this update from Admiral Group Plc
[{"type":"text","content":"\n \n\n\n\n\nAdmiral Group (\"Admiral\") today announces that it has signed new reinsurance\ncontracts with Munich Re and Hannover Re for its new car insurance operation in\nthe USA, Elephant Insurance (\"Elephant\"). Admiral also announces that it has\nextended its long-term coinsurance and reinsurance arrangements with Munich Re\nfor its UK, Spanish and Italian businesses, while the existing agreement for the\nGerman business remains in place.\n\nThese partnership arrangements build further on the successful risk and profit\nsharing model which has been at the heart of Admiral's success in its\nestablished UK business.\n\nMunich Re and Hannover Re have both entered into quota share reinsurance\ncontracts with Elephant from 1(st) January 2010. Munich Re and Hannover Re will\neach take one third of the USA risks and Admiral will retain one third for its\nown account. Both agreements are intended to be long term. The Hannover Re\ncontract is for up to 10 years whilst the Munich Re agreement is for up to 15\nyears. Both agreements include break clauses at earlier dates. Further details\nare contractually confidential.\n\nIn Europe, Admiral has extended its reinsurance agreements with Munich Re in\nboth Spain and Italy to a total of 15 years. Both agreements have also been\nrevised to include a stronger alignment of long term interests and higher profit\ncommissions for Admiral if results are very positive.\n\nIn the UK Admiral has extended its current agreement with Munich Re for 2\nfurther years to at least the end of 2016. Munich Re will retain 40% of\nAdmiral's UK risks for these additional years. Admiral has committed to retain\nat least 25% for the duration of this agreement whilst the allocation of the\nbalance is at Admiral's discretion.\n\nCommenting on these developments, Admiral Chief Executive, Henry Engelhardt,\nsaid: \"This is a very good day for Admiral Group. These deals will help us\nperpetuate our model that minimises risk and consistently produces a high return\non capital. We believe it is in our shareholders best interest to reduce our\nrisk, particularly in the early development stage of a business, in return for\nsacrificing some of the profit down the road. This helps us to couple good\ngrowth with solid dividends.\n\n\"We have a long-standing relationship with Munich Re that now is like...