Solvent schemes offer real boost to market as it combats legacy issues: The advent of solvent schemes of arrangement has been a major step forward.

winter 2003 (Lead news page)

Run off business

Press Coverage:
Ruxley buys Aviation & General

Aviation & General Insurance (A&G) has been purchased by Ruxley Ventures, a vehicle set up for the purpose which is 80 per cent owned by Ruxley Investments and 20 per cent by Spectrum Syndicate Management. A&G began writing aviation business in 1935 and from 1983 it took a 50 per cent participation in an aviation pool until it went into run-off in 1993.

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The other members of the pool, Prudential and Pearl, have agreed to transfer their portions so that A&G holds 100 per cent of the pool.

‘This was essential to the deal,’ explains Ruxley’s MD, John Winter. Once the transfer has received court approval a scheme of arrangement will be proposed to the policyholders. The A&G book, formerly owned by a consortium of London companies, includes substantial APH exposures.

A&G is Ruxley’s second run-off acquisition. In December 2001 Ruxley Investments purchased City General from AGF. City General’s book of APH business comprised around 1000 claims and its last policy had been written in 1965. Ruxley proposed a scheme of arrangement in May 2002 and by May 2003 it had paid the last agreed claim and closed down the book.

‘The policyholders were paid in full; the advantage to them was that they had earlier payment than they would have had otherwise,’ says Winter. The outwards reinsurers had to be commuted with individually: ‘It took some negotiating but at the end of the day it was not a problem because it brought them finality.’

Ruxley is looking to acquire more APH accounts in the future and sees plenty of potential: ‘Large insurance companies are concerned with their futures, not the legacies of the past,’ says Winter. ‘They are seeking ways of exiting and becoming more proactive in getting rid of old portfolios.’