When a trade-focused website reveals a company is being investigated by the Financial Conduct Authority (FCA), there’s only one real option: To own up.
And that’s exactly what insurer Jardine Lloyd Thompson (JLT) has done amid accusations that brokers have been sharing competitively sensitive information within the aviation sector.
The matter relates to JLT Speciality, a division of Jardine providing wholesale and retail insurance broking, risk management and claims consulting services. It has a 39% market share of the large airline carrier market.
Barrie Cornes, an analyst at Panmure Gordon says the aviation interests of JLT Speciality represented approximately 5% of Jardine’s group trading profit in 2016.
He therefore doesn’t think the downside risk is material, but says the share price ‘could well be vulnerable to a hit to sentiment’.
In mid-morning trading, Jardine’s shares were trading up 0.3% at £11.09.
Investors may not have been aware of the news as Jardine hasn’t issued a statement through the regulatory news service. Instead, it has just published a comment on its website.
Jardine’s statement says: ‘(We are) participating in this investigation and confirm that JLT Specialty is providing all appropriate assistance to the FCA.
‘We are unable to comment on the ongoing investigation beyond saying that JLT takes all regulatory matters very seriously and has a constructive relationship with all the regulators that it works with across the JLT Group.’
Other major brokers including Aon, Marsh, Willis Towers Watson and United Insurance Brokers have also confirmed they are also under investigation by the financial regulator.
Marsh says the FCA ‘had reasonable grounds for suspecting that Marsh Limited and others have been sharing competitively sensitive information within the aviation (re)insurance sector’.
