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Close Brothers Group PLC on Wednesday said it will focus on commercial lines within its insurance premium finance business, reducing its emphasis on personal lines. The overall impact is expected to be a 30% decline in the overall loan book of the company’s Premium Finance arm over the next three years. The operating profit of that business also is expected to decline, due to the lower loan balances and the investment required in the commercial lines. The London-based merchant bank said the decision was part of its effort to simplify its business portfolio and improve operational efficiency. In response, Close Brothers shares fell 6.4% to 384.85 pence early Wednesday in London, the second worst performer in the FTSE 250 index, which itself was up 0.2%. Close Brothers said it sees ‘significant opportunities’ to expand in the commercial lines market. It aims to increase its share of business with its existing broker partners and to develop new broker relationships. Premium finance allows companies and individuals to spread the cost of insurance premiums over time. Commenting on the personal lines business, Close Brothers said: ‘While personal lines has played an important role in our retail offering for many decades, the market environment has changed. Rising costs to serve customers, broker consolidation and increasing operational complexity have impacted the long-term attractiveness of personal lines relative to other parts of our portfolio.’ Chief Executive Mike Morgan said the repositioning of the Premium Finance business offered better risk-adjusted returns. ‘Over time, we expect this business to operate with a smaller customer base, but with higher income per case and a reduced cost base, leading to improved profitability and returns,’ he said. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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