BP Marsh & Partners posts strong 2020 results, praises resilience of insurance portfolio

BP Marsh & Partners, a specialist investment company with significant stakes in a number of insurance ventures including Sage, Nexus Underwriting and XPT Group, has posted a solid set of results for 2020, as it said its portfolio had weathered the storm of COVID-19.

For 2020, the group has achieved a 9.5 percent increase in its Net Asset Value (net of dividend) to reach £149.9m and an increase in the equity value of its portfolio by £12.9m to reach £131m. In addition, its loan book was £17.1m (2020: £18.8m).

As at 31 January 2021, the Company had available cash of £2.7m, comprised of a free cash balance of £0.7m together with access to a further £2.0m by way of a loan facility with Brian Marsh Enterprises.

Net of the dividend payable in July 2021 and other commitments, current available cash, including the loan facility, was £2.5m.

It said that its simple business model of investing in good quality businesses led by entrepreneurial and committed management teams combined with deliberately creating a diverse portfolio, has helped it “weather this particular storm”.

In noted that in June 2020, it added to its insurance portfolio with a 30% investment in Sage Program Underwriters, a provider of specialist niche insurance products based in Oregon in the US. It said that since the investment Sage has performed well, exceeding its first-year budget. The niche industries in which Sage operates experienced strong growth in 2020, and Sage is well-positioned to take advantage of this growth as it has continued into 2021.

It also commented on the performance of some specific investments. It said the growth of Nexus Underwriting Management, which remains the Group’s largest investment, continues to date. In December 2020 Nexus acquired the Hiscox MGA Marine business. Nexus had Gross Written Premiums for its 2020 Financial Year of £308m.

It said that XPT Group, headquartered in New York, has experienced “commendable performance in difficult circumstances” and is aiming to produce Gross Written Premiums of $400m for its 2021 financial year. During the year, XPT acquired two new businesses, taking the total to eight acquisitions in its four years of trading. Additionally, XPT launched a new trucking programme via its subsidiary, WE Love & Associates.

The Group’s Canadian Investment, Stewart Specialty Risks Underwriting, has experienced significant growth since the Group invested in it as a start-up, in January 2017. Since it was established it has grown Gross Written Premiums to C$33m (£19m) in 2020, with a budget to increase this to C$55m (£31m) for its 2021 Financial Year.

In September 2020, the Group also provided additional funding of £1.5m to EC3 Brokers Group by way of subscription of further Preference Shares, taking its shareholding to 35%. EC3 has faced a challenging year with Covid-19, felt most by its Event Cancellation business.

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