Ring-fence deal costs Cox £245m

COX Insurance's decision to make a break from its disastrous past has left the Lloyd's underwriter nursing a £201m loss for 2001. The company's survival strategy, which involves ring-fencing the losses incurred by its commercial insurance operations, led to write-offs totalling £245m.

But Cox said it made a £37m operating profit from the personal insurance lines, which are mainly vehicle policies, that will be the core on the ongoing business.

Cox struck the ring-fencing deal with Lloyd's earlier this month after revealing it would book losses of £125m as a result of the 11 September attacks, three times its initial estimate.

The insurer also confirmed today that it had raised £73m through a share placement that will see venture capitalists Warburg Pincus and Palamon retain their combined 35% stake in the company.