Thomas Miller in talks to acquire navigators’ fixed-premium P&I business

Navigators Management (UK) Ltd and Thomas Miller Specialty announced yesterday January 16th that they had entered into exclusive discussions under which Thomas Miller Specialty would acquire Navigators’ fixed-premium protection and indemnity business.

Guy Pierpoint, Chief Executive Officer, Thomas Miller Specialty, said that the move was “a logical and progressive step for Thomas Miller Specialty, enabling us to create scale in a competitive market, whilst focusing on the specific and complex servicing needs of clients”.

Colin Sprott, Chief Underwriting Officer of International Insurance for Navigators, said that “the most important element of this mutually beneficial transaction is that it will meet the long-term needs of our clients”, adding that “Thomas Miller Specialty shares Navigators’ commitment to high-quality customer service, making them an excellent choice to support the much-needed process of consolidation in the protection and indemnity market. We remain committed to this market, demonstrated by the fact that we will continue to provide underwriting capacity to Thomas Miller Specialty.”

Thomas Miller Specialty said that it was anticipated that the transfer would be completed well in advance of February 20th 2018, subject to receipt of required approvals.

Thomas Miller Specialty is a commercial Managing General Agency (MGA) created when Thomas Miller acquired the Osprey Underwriting Agency in 2015. Its current offering in P&I is to owners of smaller craft and vessels on a fixed limit, fixed premium basis. A wide variety of vessel types and operations are catered for including tugs, barges, fishing vessels and vessels engaged in the carriage of dry cargoes. Thomas Miller as a whole booked revenue of £117m in 2016, generating a profit of £16.4m profit on ordinary activities.

In its 2016 report Navigators observed that the International Marine operating segment produced a combined ratio of 94.8%, a slight improvement over 2015. The majority of its International Marine portfolio is underwritten in London, and, said Navigators, was “adversely impacted by the high cost of trading in the Lloyd’s London market, as its marine expense ratio was 47.4% for 2016, relatively consistent with the overall Lloyd’s expense ratio for the market. Navigators said at the time that this level of expense ratio was “unprecedented and unsustainable and presents a threat to the London market.”

Navigators observed that its European branch offices “achieved meaningful growth in 2016 at significantly lower commission ratios”. The European branch offices produced Marine gross written premium of $31m for 2016, up 22.0% over 2015, and generated an underwriting profit in 2016.

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