Still flying Sportscover’s owner Wild Goose Holdings had a turbulent 2019, but its founder says the future remains bright By John Deex
W
ild Goose Holdings (WGH) sent tremors through the market in July when it announced it was heading into voluntary administration. Although not many people knew much about the company, they were quickly made aware that it owns Australia’s largest sports insurer, Sportscover Australia. WGH and its administrators immediately emphasised the issue was nothing to do with Sportscover, and would not affect the operations of the specialist underwriting agency. WGH Founder and Chairman Peter Nash could only say at the time that the administration related to “the dim and distant past” of its Lloyd’s managing general agency, Syndicate 3334, which Sportscover sold to Hamilton Insurance in 2014. Now, following agreement with creditors on a deed of company arrangement, Mr Nash is able to explain the issue in greater detail. The administration came about as a result of one debt, he tells Insurance News, owed to a large reinsurer – not for the purpose of reinsurance but for capital provision in Syndicate 3334. How it came about was “a little unusual”. “Back in 2012 I signed a document that had a guarantee in it, that in the event that the capital of this particular provider was drawn down in a certain way, then WGH would make good the amount of that drawdown,” Mr Nash says. “Subsequently we sold the syndicate, and a little unusually the business that bought the syndicate [Hamilton] determined to close three years at the one time, rather than one year. “As a consequence Lloyd’s drew down on this capital slightly more than the capital the syndicate was due to pay, which triggered the guarantee.” It is quite rare for these guarantees to be triggered, Mr Nash says. “It is generally an unusual set of circumstances.”
As the guarantee was attached to WGH, not Sportscover or the syndicate, WGH was left facing a £4 million bill. “We needed time and the only way we could get it was to go through the administration,” Mr Nash tells Insurance News. “There wasn’t another alternative, really.” He says the deed of company arrangement is a way for the company to trade forward and work its way through the debt involved. While WGH is now out of administration, there are still a number of issues to resolve. “There’s a range of things the company will be doing to procure the payment of the debt,” Mr Nash says. “We have two years to come up with a way in which that can be done. “It may well be that when the final amount as to what is owed is agreed that the money is borrowed. We are certainly looking at selling some of the other businesses that WGH owns. “It’s all very straightforward and contractual.” The episode has left Mr Nash wondering if and how things could have been better handled. “I have asked myself 100 times whether I could have done it differently and the answer is probably no. The likelihood of this actually being activated was very low. “It’s like Lotto, but in reverse. We had a ticket, and it came up.” The fact that WGH owns Sportscover caused some concerns in the local market, and Mr Nash is quick to stress that the issue never had, and will not have, any impact on Sportscover Australia’s operations. “The only relationship between WGH and Sportscover is the ownership of the shares,” he says. “In the worst case scenario WGH would have to divest itself of the shares in Sportscover, but that’s not what is going to happen.” Mr Nash says Sportscover Australia has always
insuranceNEWS
February/March 2020
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