Wellington Underwriting Agents Ltd

Current Syndicates - 51, 672, 2020
Other Syndicates of Interest

27 April 2002Wellington announce arrangement with Berkshire Hathaway to increase capacity to £963 million for 200
Wellington Underwriting plc ("Wellington") has announced a major initiative which will increase substantially its underwriting capabilities. Wellington has entered into an agreement in principle with Berkshire Hathaway, whereby certain of Berkshire Hathaway's wholly owned subsidiaries have agreed to provide a 30% qualifying quota share (QQS) reinsurance to syndicate 2020 for the 2002 year of account and also to provide the funds at Lloyd's necessary for Wellington to form a new £150m syndicate which will underwrite on a consortium basis with syndicate 2020 for the 2002 year of account. Wellington has a 46% share on syndicate 2020.

These arrangements will:

· Increase Wellington's managed capacity from £625m to £963m for the 2002 year of account, thereby enabling Wellington to meet its original planned premium income of £950m for the current underwriting year.

· Substantially enhance Wellington's revenues through its receipt of:

- a management fee of £0.9m from the new syndicate;
- a profit commission of 17.5% of the profits of the new syndicate;
- 46% of the commissions payable to syndicate 2020 on the QQS.

· Reduce Wellington's costs through the allocation of a proportion of syndicate 2020's expenses to the new syndicate.

The proposed arrangements have been approved by Lloyd's in principle, but remain subject only to the approval of capital providers participating on syndicate 2020 for the 2002 year of account. It is anticipated that a circular seeking approval for the proposals will be sent to capital providers shortly. In accordance with Lloyd's normal requirements, capital providers will have a period of 21 days in which to vote for or against the proposed arrangements.

04 July 2000Limit and Wellington call off merger
Limit PLC has advised capital providers that the Board has now recommended an improved proposal from QBE. It is expected that a formal offer from QBE will be sent to Limit's shareholders in the near future in order that the offer may be declared unconditional before the end of July. Wellington Underwriting has now confirmed that they will be withdrawing their recent proposal for the acquisition of Limit.

The proposed merger of Limit Syndicates 79, 566 and 456 with Wellington Syndicate 2020 will not therefore proceed.

Limit has commenced discussions with the senior management of QBE as to their plans for the Limit business and will keep capital providers informed of developments.

Limit has also confirmed that they do not have any plans to merge any Limit syndicates for 2001, other than the previously announced merger of motor syndicates 877 and 980.
05 May 2000QBE bid for Limit threatens merger
The proposed merger of Limit PLC and Wellington Underwriting Agencies Limited ("Wellington") is uncertain following an unsolicited offer made by the Australian company QBE Insurance Group for Limit. QBE is offering 120p per share for Limit, compared to the current share price of 85.5p and is conditional on the Wellington merger being abandoned.

The board of Limit commented that, "the offer significantly undervalues Limit". However, it was aware that certain of its institutional shareholders would welcome in the short term a cash offer for their Limit shares at a substantial premium to the current share price. It now proposes to seek a higher offer for Limit from potentially interested parties.

The board of Wellington confirmed it would monitor the situation and was prepared to withdraw from the proposed Limit / Wellington deal if it considered the merger was no longer in the best interest of Wellington shareholders.

Ian Agnew, chairman of Wellington, commented, "I regret the possible offer being made by QBE for Limit. The intended merger of Limit and Wellington will create an impressive Lloyd's and international insurance business capable of generating superior returns for both sets of shareholders".

Limit released the following statement on 2nd May stating that, "Although there is now uncertainty as to whether Limit will be able to complete its proposed merger with Wellington, it intends in the meantime to continue work towards this objective".

The statement also pointed out that Limit had received additional irrevocable acceptances (subject to the merger offer being made for Wellington) in respect of 7.7% of Wellington's issued ordinary shares, which together with Limit's existing 3.7% share and earlier irrevocables amounted to 40% of Wellington's issued ordinary share capital.

Source - Insurance Day 2nd May 2000
02 May 2000Wellington Underwriting Agencies Limited
Limit and Wellington have now revealed further details of their merger, which will create an insurance business with an aggregate market capitalisation of more than £310m.

The merged company, to be named Ensign Underwriting, is to be positioned as an international specialty insurance business.

Wellington shareholders will receive 91 Ensign shares for every 100 Wellington shares as part of the deal which values the two businesses as Limit 71% and Wellington 29% of the total.

Following the merger, Ensign proposes to repurchase up to 10% of the issued ordinary share capital, subject to price.

Ensign intends to make the following key management appointments:

Jonathon Agnew Executive Chairman
Ian Agnew Deputy Chairman
Julian Avery Group Managing Director
Julian Cusack Finance Director
Steve Burns Agency Managing Director
Peter Grove Agency Underwriting Director
Anthony Taylor Director of Agency Strategy

As part of it's merger plans, Ensign plans to reduce the number of its managed syndicates from nine to three for the 2001 year of account. Limit's Syndicates, 79, 456 and 566 will merge with Wellington's Syndicate 2020, using Wellington's partnership model developed over recent years. Limit's commercial motor Syndicates 877 and 980 will also merge and Syndicate's 318 and 1036 will be disposed of.

Ensign hopes that the merger of the two companies will result in £26m cost savings to the combined group, coming mainly from £20m reduction in reinsurance costs.

Source: Insurance Day - 27th April 2000



29 March 2000Wellington and Limit enter merger talks
Two of the Lloyd's market's largest companies, Limit PLC and Wellington Underwriting PLC, have confirmed that they have entered into preliminary talks regarding a possible merger.

Analysts believe that the deal under discussion would be on a share-for-share offer basis with no premium payable on the share price.

The market capitalisation of the combined group would be approximately £370m ($590m),

Stephen Searby, associate director of Standard & Poor's said, "Consolidation is inevitable and is being driven by the requirement for Lloyd's market companies to achieve critical mass. There are obvious benefits accruing through the merger of these leading Lloyd's companies. In particular, if the merger does proceed, the combined body will control more than 12% of Lloyd's capacity".

Mark Hewlett, managing director of Moody's Investor Services' European property, casualty and reinsurance division said "I think it is a very positive development for the marketplace and for Lloyd's that two of the largest and most respected listed entities are getting together. It highlights future activity such as potential mergers, acquisitions and consolidation".

The general feeling from other commentators was that the main asset of a merger such as that between Limit and Wellington was the underwriting expertise, which might be lost in a hostile bid.

On the back of this announcement Limit's shares opened up 2.7% at 96p, whilst Wellington's shares were also up by 3.7% at 99p.


Source: Insurance Day - 29th March 2000
22 September 1999Wellington bilateral deal with Grenville
Wellington Underwriting Agencies Ltd (WUA Ltd) has agreed bilateral deals with the members of Syndicate 2020 listed below to acquire participation rights for the 2000 year of account in auction 5:

Grenville Underwriting Plc* £600,341 @ 24p / £
Grenville Underwriting II Ltd* £2,421,398 @ 24p / £
CLM £1,436,200 @ 24p / £
New London Capital £3,762,500 @ 24p / £

WUA Ltd reserves the right to participate in the auction at prices that may be different to those outlined above. WUA Ltd also reserves the right to enter into other bilateral transactions.

* Grenville Underwriting Plc and Grenville Underwriting II Ltd are subsidiaries of Greenwich Insurance Holdings Plc.
01 July 1999Wellington Motor Claims Irregularities
David Roy Phillips, a former employee of Wellington Motor, has been imprisoned for eight years after pleading guilty to the charge of theft at Warwick Crown Court.
17 March 1999Wellington to recruit new Aviation Underwriting Team
Wellington have announced that, subject to Lloyd's approval, Peter Williams, former Active Underwriter of Syndicate 960, will lead the Aviation division in Syndicate 2020. He will be joined by Doug Curties and Robert Swinton, also from Syndicate 960.

Brian Beagley, Active Underwriter on Syndicate 960 from 1974 to 1994 will join the Syndicate on a consultancy basis.
15 January 1999Wellington Link with Linneman
Wellington Underwriting has applied to purchase US Managing Agent J Linneman for US $4.2 m. Linneman currently introduces property and casualty facultative reinsurance business to a number of Lloyd's syndicates, including S.51 and S.672. In the event that this transaction is completed, Linneman will act solely for S.2020. It is hoped that the deal will be completed by March 1999.

 
 

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