More Recent Lumley History

By 1987 a block of shares of about 28% had been acquired by a third party who in their other businesses had run into difficulties and they were wishing to sell their Edward Lumley Ltd shares.  In order to acquire these shares it was necessary to make an offer for all outstanding shares.   This was done by the London company Edward Lumley Holdings Ltd making an offer and acquiring 100% of the shares.

As the company gained strength it was successful in underwriting at a combined loss ratio well below most competitors by managing its costs.  It was writing business from brokers and could decline those risks which were not likely to produce a profit.  Being now a wholesale market for brokers it was harder to be in the broker market and competing at that level as well.  Consequently the broking business was sold to AON both in Australia and South Africa.

In 2003 a strategic review indicated that the Australian and New Zealand Insurance companies would need extra capital if they were going to continue to grow.  Already a good deal of profit was being paid away to quota share reinsurers to ensure sufficient capital for business currently being written.  The options were to float again and loose control over time or to sell.  After careful consideration Richard and Henry felt that the second option would produce the best option going forward as with our large families having all the family wealth in one insurance company which would always be subject to volatile returns.  The nature of insurance did not seem to be the best option for the next generations. 

As a good price was obtainable and the UK businesses would be retained the sale to Westfarmers went ahead in 2003.  That they valued the goodwill and standing of the business with brokers in the Australian and New Zealand market is shown by the fact they have continued using the Lumley name.

With the increased reliability of motor vehicles the potential of motor warranty business declined and a sale of the Coventry business took place in 2006. The Maidenhead business became the object of desire from a competitor who was prepared to offer a price we could not refuse but unfortunately this competitor had not made real plans on how to manage the merger and in any case ran into difficulties and was broken up.

Whilst in many ways it was disappointing to sell what had been built up as a great insurance business which had adopted to changing circumstances the next step would have required new management and capital producing an unknown risk and loss of control.  As it is the family have an investment portfolio which has a known return with a lower risk factor to family members and should allow them to plan their lives accordingly.