Close Brothers Focuses Premium Finance Business on Commercial Lines
Why we think this is neutral
The RNS announcement provides an update on Close Brothers' Premium Finance business, but does not contain any of the mandatory news types such as contract news, order news, trading update, or annual results. As a result, the sentiment is assessed as neutral.
Key Points
- Close Brothers is repositioning its Premium Finance business to focus more on commercial lines insurance premium finance
- The group will be reducing its emphasis on personal lines insurance premium finance
- The Premium Finance loan book is expected to decline by c.30% in the next three years
- Operating profit in the Premium Finance business is also expected to reduce during this transition period
Summary
Close Brothers Group plc is updating investors on its Premium Finance business. The group is focusing the growth of its Premium Finance business towards commercial lines insurance premium finance, where it sees the strongest risk-adjusted returns and long-term growth potential. While personal lines insurance premium finance has played an important role in the Retail offering, the market environment has changed, and the group will be reducing its emphasis on this area. The group expects the Premium Finance loan book to decline by c.30% in the next three years, with operating profit in this business also expected to reduce. However, the group is committed to maintaining full support for both customers and brokers throughout this transition period.