Eurozone heads towards second recession

Single-currency bloc reports 0.2% GDP drop in Q2

Gross domestic product (GDP) in the eurozone dropped 0.2% in the second quarter of 2012 despite growth in Germany and the Netherlands.

This follows on from zero growth in the single-currency bloc in the first quarter of the year

If GDP falls again in the third quarter, the eurozone will enter its second recession in three years.

The German economy grew by 0.3% and the Netherlands’ by 0.2%, while France’s growth was flat. But this failed to offset declines elsewhere.

There are also concerns that stronger economies such as Germany and France will not be able to keep up their current performance. The Financial Times quoted BNP Paribas economist Catherine Stephan as saying: “Against a backdrop of high tensions in financial markets, weak domestic demand among almost all eurozone members, output may fall over the next quarter.”

Lorica takes three from Towergate in hiring spree

Broker also taps Swinton and JLT for latest recruits

Lorica Insurance brokers has announced five new hires – three from Towergate and one each from Swinton and JLT.

Daniel Schofield joined on 13 August as branch director of Lorica’s newly-opened Leeds office. He was previously area broking and business unit director at Towergate in Leeds. He has also served as a director of DE Ford Insurance Brokers in York.

Also from Towergate are Sapphire Kalinski, who joined Lorica’s Hemel Hempstead SME team as SME account manager on 13 August, and Linda Scurry, who will join the claims team in Hemel Hempstead as claims handler on 4 September.

Kalinski was a personal lines team leader at Towergate, while Scurry was a personal lines manager.

Lorica has also hired former Swinton commercial manager Kelly Belton-Brown as affinities manager. She will join the broker on 3 September.

Former JLT executive Jim Cadle joined Lorica’s head office team on 13 August as sales executive. He has also previously worked for insurers AXA and Travelers.

Commenting on the hires, Lorica chief executive Matthew Bray said: “I am delighted to continue our drive to recruit talented individuals and I look forward to working with them at Lorica Insurance Brokers.”

Scottish police start uninsured driving blitz

Three-day campaign launched

Scottish police have started a crackdown on uninsured and unlicensed drivers, according to The Scotsman.

The police will ramp up checks on drivers’ insurance details, as well as being more vigilant for other driving offences.

Tayside Police head of road policing chief inspector Sandy Bowman said the campaign would increase road safety.

Those caught driving uninsured face a maximum £5,000 fine and possible disqualification. The crackdown will finish tomorrow.

Quindell completes purchase of claims management network

Quindell is paying for the company in stock, and has issued 27.1m new shares to satisfy this. The shares are expected to start trading on the London Stock Exchange’s Alternative Investment Market on 20 August.

Quindell’s rationale for buying ICM is to forge closer relations with the independent claims managers that use the network.

Under the terms of the deal, ICM has pledged to make a profit after tax of £500,000 for the year to to 31 May 2013 and generate cash at least equal to the profit target. If ICM misses its profit or cash targets under the deal, it will pay Quindell the cash equivalent of 6.5 times the shortfall.

In the year ended 31 December 2011 ICM reported turnover of £1.2m and profit before tax of £300,000.

Quindell chairman and chief executive Rob Terry said: “As a result of working with ICM over the past months, a number of joint client contracts have been achieved validating our shared vision for the use of technology to facilitate change within the insurance industry to stamp down the cost of claims.

“These wins and other initial pilots won independently of ICM with a number of major brands has ensured that July has been the strongest month in Quindell’s history, with regards to all key performance indicators (including profit, cash generation and EPS) providing a great foundation for the second half of 2012 and beyond.”

Oval boss Blanc reveals company results in buoyant staff email

Consolidator boosts underlying earnings by 16% and trims debts by £6m

Oval improved its underlying earnings (EBITDAE) by 16% to £17.7m for the year ended in May 2012.

Oval chief executive Peter Blanc fired off an upbeat email to staff revealing that gross sales increased by £5.5m to £108.1m, when compared to the year ended May 2011.

The email read: “We have performed well and should be proud of the progress we have made in the year and the potential it suggests for the coming year….

“We made some very tough decisions in the year; losing some good people in the process, however the result is that the business is leaner and better structured to focus on our future challenges.”

Oval has undergone a big year of transformation at director level. Former chief executive Philip Hodson stepped down to be replaced by Peter Blanc who has installed his own management team. The shake-up led to the exit of operations director Jeff Herdman.

The consolidator also managed to trim its debts by £6m. The 2011 accounts revealed the firm had net debt of £39.7m.

Blanc has previously told Insurance Times of his desire to pay off minority shareholders once he is happy with the firm’s debt dynamics.

He said in June: “Debt-wise we stopped just in time in my view. We called a halt in 2008 when the world started to end just a bit. By the end of this year, we’ll have net senior debt of 1.5 to 2 times EBITDA which in the grand scheme of things is almost insignificant.

“We would have debt where is helpful to the business. If I had my way it would be a nice thing to do to acquire a big slice of those minority shareholders. Its good for two things: it would value enhancing for the rest of the shareholder group and it gives an option of a liquidity event for shareholders where they need a liquidity event.

“We’ve got some shareholders who have been with the company quite a long while, and quite frankly they probably weren’t still expecting to be with the company now.”