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Chaucer To Exit The UK Motor Business; Will Direct All Resources To Lloyd's Specialist Classes


hanover

WORCESTER, MA -- April 13, 2015: The Hanover Insurance Group, Inc., today announced that it has signed a definitive agreement through which it will transfer its United Kingdom motor business to Markerstudy Group, a UK-based insurance provider. The transaction will be executed through a 100 percent reinsurance arrangement for prior claim liabilities and in-force policies written by this division and the sale of the entities associated with this business.

The transaction, subject to regulatory approvals as well as satisfaction of certain closing conditions, is expected to close in the third quarter. It is not expected to have a material impact on The Hanover's 2015 operating earnings. The total consideration for the transaction is approximately $60 million.

"The transfer of Chaucer's UK motor business to Markerstudy will allow our team at Chaucer to direct even more resources to Lloyd's specialist classes, building even greater expertise in preferred market segments," said Frederick H. Eppinger, president and chief executive officer of The Hanover.

Robert A. Stuchbery, president of The Hanover's international operations and chief executive officer of Chaucer, said, "The UK motor division has made a solid contribution to our success for many years. As a member of the Markerstudy Group of companies, it will benefit both from strategic investments in products and services and affiliation with an organization committed to building its presence in the domestic UK market, setting the stage for the UK motor division's continued success."

Chaucer's UK motor business primarily focuses on traditional personal auto insurance, as well as specialist motor classes, including motorcycles, classic and specialist vehicles, and commercial auto. In 2014, this business generated net premiums written of $297.7 million and net premiums earned of $305.9 million. This division produced a net combined ratio of 100.7% in calendar year 2014, including a loss ratio of 73.5% and an expense ratio of 27.2%.

Willis Capital Markets & Advisory advised The Hanover on the transaction.