Business
Re Contract
Re Contract.
About this update from Admiral Group Plc
[{"type":"text","content":"\n Admiral Group PLC\n07 December 2006\n\n\n Coinsurance and Reinsurance Arrangements \n\nAdmiral Group ('Admiral') announces that it has extended its long-term\ncoinsurance arrangement with Great Lakes Reinsurance (UK) PLC (Great Lakes), a\nsubsidiary of Munich Re Group. Admiral has also signed new reinsurance contracts\nwith Swiss Re and Partner Re.\n\nProportional support by Munich Re and other leading reinsurers has been an\nimportant part of Admiral's business model since its formation in late 1999.\nAdmiral's first long-term proportional reinsurance contract was with Munich Re\nand provided support from January 2000. This was superceded by a new coinsurance\ncontract effective from January 2002 through Great Lakes . This contract was due\nto lapse in December 2008. It has now been agreed that Great Lakes will continue\nto support Admiral's business beyond the end of the current agreement. The new\nextended agreement is a continuous contract. However, both parties have a right\nto cancel with two years notice, exercisable no earlier than 31 December 2012.\n\nAdmiral has also signed a five-year quota share contract with Swiss Re and a\ntwo-year quota share contract with Partner Re. Swiss Re will reinsure 10% of\nAdmiral's UK car insurance premium in 2007 to 2009 inclusive, and have an option\nto reinsure 7.5% and 5% in 2010 and 2011. Partner Re will reinsure 7.5% of\nAdmiral's UK car insurance premium in 2007 and 2008.\n\nGreat Lakes Coinsurance Contract\n\nGreat Lakes currently underwrites 65% of Admiral's UK private motor business.\nThis percentage will decline by 5 percentage points each year from 2007 to 2011\ninclusive, so that in 2011 and thereafter 40% of Admiral's UK car insurance\npremiums will be underwritten by Great Lakes . Admiral will be required, under\nthe terms of the contract, to underwrite for its own account at least 25% (22.5%\nfor 2007 only) of its UK private motor business. The balance of the premium can\nbe underwritten by Admiral or reinsured elsewhere at Admiral's discretion.\n\nThe current agreement with Great Lakes requires Admiral to seek Great Lakes'\npermission if Admiral wants to grow the number of policyholders in any one\ncalendar year by more than 11%. The new agreement includes a new, more flexible,\ngrowth cap, which allows Admiral to vary the speed of policy growth in response\nto cyclic...