Insurance Australia sells UK branch network to Swinton
Insurance Australia Group (IAG) has agreed to sell certain UK businesses for a total of £73.5 million.
Swinton is acquiring the group’s branch network, which comprises 91 High Street outlets across England and Northern Ireland, for £50 million.
The outlets are branded Equity Insurance and Open+Direct.
IAG’s Hastings and Advantage businesses are subject to management buy-outs, valued at a combined £23.5 million.
The businesses together generated approximately 29% of UK gross written premium for IAG in 2008.
The disposals and the recent closure of the group’s specialist Lloyd’s syndicate Alba and underwriter, Diagonal, will produce a pre-tax loss for the group of approximately £40 million.
Chief executive, Michael Wilkins, says that the divestments mean IAG can now focus on its specialist motor underwriting unit, Equity Red Star, which in 2008 will contribute around 71% of total UK gross written premium.
Following completion of the transactions, IAG is confident that it will continue to benefit from its existing relationship with Swinton and that the branch network will remain a distribution channel for Equity Red Star’s specialist products.
Regulatory approvals are needed but completion is pencilled in for early 2009.
Category: Companies News, Insurance News, Swinton Insurance News
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