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Watchstone skids into the red as motor premiums tumble

Losses were £3.5mln compared to break even a year earlier
accident
Changes to the Ogden rate have hurt Watchstone's ingenie arm

Troubled insurance group Watchstone PLC (LON:WTG) slumped deeper into the red as its young driver-focused ingenie business continued to suffer from changes to the Ogden rate.

This sets the amount of compensation paid to people affected by accidents and changes recently have meant lower motor premiums especially in the young driver market.

Provision for legal costs increased

Ingenie’s revenues slumped to £4.8mln from £7.7mln in the half year to June, while group turnover dropped to £19.7mln from £22.9mln.

Losses were £3.5mln compared to break-even a year earlier.

Watchstone, the former Quindell, is still embroiled in a legal battle with Slater & Gordon over the sale of its professional services division, which the Aussie law firm bought for £637mln but is now seeking to get its money back.

Watchstone upped its provision for legal costs related to Slater & Gordon’s legal action by £1.1mln to £4.3mln and said it will continue to robustly defend its position.

An SFO investigation into its accounts from the Quindell days is ongoing, said the statement.

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