Lonmar loses key account as director resigns
Lonmar Global Risks has been hit twice in recent weeks after losing its Burrup account and with head of casualty Tom Payne resigning from the board.
Lonmar is also continuing to reel from its legal defeat by Tysers, which has obliged it to pay its larger London market rival upwards of £1mn to cover court costs.
Some hope of a more favourable outcome had remained until a High Court judge threw out Lonmar's final appeal attempt in early March.
Australia-based Burrup Fertilisers was put into receivership in February, depriving Lonmar of an estimated $1mn in annual brokerage, according to sources. CEO Simon Rice was the senior client contact for the account. In the last two years Lonmar has also lost major French retail broking account Segap to Tysers - a reverse that instigated the costly 18-month legal tussle.
It also terminated the employment of its head of marine Andrew Harding in October last year following disciplinary proceedings.
Meanwhile in mid February, Payne - who is believed to be one of Lonmar's largest producers - left the board, although he has remained as head of casualty.
Lonmar was the management buy-out (MBO) of the London wholesaler SBJ Global Risks, which was acquired by Axa.
The Insurance Insider revealed in December that MBO vehicle Centrix Insurance Holdings received a £4mn loan from run-off broking subsidiary Old Co (No 103), with the capital drawn from unclaimed funds. The money was subsequently used by Centrix to pay off short-term loan notes that were used to finance the 2008 MBO from Axa-owned broker Bluefin.
Centrix's 2009 accounts show a £3.2mn pre-tax loss. Lonmar - the main trading subsidiary - booked an operating loss of £29,000 after registering profits of £1.4mn in 2008. However, turnover rose by 5 percent in 2009 to £21.4mn.
Lonmar told The Insurance Insider that it had generated Ebitda of around £3.6mn prior to exceptional items in 2010. "Lonmar's business is sound and continues to grow with encouraging prospects in the pipeline," it continued. "The company's balance sheet is sound and Lonmar exceeds the FSA's regulatory capital requirements."