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Brit parts company with PI heads

Brit Insurance Holdings has embarked on a shake-up of its professional indemnity division which has led to the departure of its two most senior underwriters.

According to sources, Kevin Huttly, Professional Risks underwriting director and Professional Indemnity divisional underwriting director Jenny Martin are leaving the company.

Both Huttly and Martin worked in Brit's Global Markets division, headed by Matthew Wilson, who took up his position as CEO in April 2008.

Their departure may cause ripples in the investment community because Brit, as a lead writer of professional indemnity business, is scrutinised closely for any signs of potential D&O/E&O losses occurring from the banking crisis and broader economic slump.

Indeed Brit is currently in the spotlight as the lead insurer for a directors' and officers' policy, placed at Lloyd's, for Allen Stanford and other executives of the Stanford Financial Group (SFG). The coverage, of which Brit has a share under 10 percent, is understood to be for $110mn.

Stanford is currently in prison accused of leading a massive Ponzi scheme, with his assets frozen along with those of several senior SFG executives.

Aside from the Stanford D&O policy, Brit's PI practice has also suffered a difficult time in continental Europe, and is also understood to be pulling out of the notoriously difficult Italian PI market.

The (re)insurer is also facing exposure to sub-prime related losses, as CEO Dane Douetil noted at the time of the group's interim results in August: "Reserves are unwinding very much as expected; no new notifications since the end of last year. We had 40 then and we have 40 now."

For the first half of the year Brit saw gross written premium increase by 30.2 percent - or 11.6 percent at constant exchange rates - to £983.0mn for the six months to 30 June 2009, compared to £754.8mn in the first half of 2008, as it secured average rate increases of 5.2 percent.

However, Brit noted that some casualty classes, particularly US commercial PI and UK specialist liability, "are not seeing the price rises required in the face of low interest rates".

Brit declined to comment.

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