LONDON (dpa-AFX) - Close Brothers Group said it is focusing the growth of Premium Finance business towards commercial lines insurance premium finance, where it sees strongest risk-adjusted returns and long-term growth potential. The Group will be reducing emphasis on personal lines insurance premium finance. The Group will withdraw from certain broker relationships over the next six to 12 months. These brokers predominantly offer personal lines.
Close Brothers will optimise the cost base across the whole Premium Finance business. The Group estimates a steady state cost reduction of approximately 20 million pounds per annum by the 2030 financial year on an underlying basis excluding the impact of inflation and business growth.
Close Brothers expects the Premium Finance loan book to decline by approximately 30% in the next three years. Over the same period, operating profit in this business is expected to reduce. The Group expects this to be offset gradually by targeted growth in commercial lines and cost savings from a more efficient operating model. The net interest margin of the Premium Finance business is expected to remain broadly stable.
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