Insurance Australia Group has agreed to sell its UK market distribution business for £73.5 million as part of a restructuring strategy, which will enable the company to focus on its motor underwriting business.
Insurance Australia Group has agreed to sell its UK market distribution business for £73.5 million as part of a restructuring strategy, which will enable the company to focus on its motor underwriting business.
IAG’s UK insurance branch network will be sold to Swinton Group for £50 million, while its Hastings and Advantage businesses will be sold in a management buy-out for £23.5 million.
The combined transactions will result in a pre-tax loss of £40 million for the group.
The MBO is being led by Edward Fitzmaurice, Hastings chief executive, and Keith Charlton, Advantage chief executive, and will be financed by the management and a small group of private investors.
As part of the deal, IAG is providing the MBO team with an overdraft facility of £3.5 million for a period of two years on commercial rates. Neil Utley, chief executive of AIG’s UK operations, is a minority shareholder in the buy-out and will have a non-executive role in the business.
