HIH has sold its short-lived shareholding in its joint venture with Allianz for $125 million – the minimum price the company could have expected.

Under the agreement it signed with Allianz that came into effect on January 1, HIH placed all its former Australian business – except workers’ comp, travel, PI and corporate broker business – into Allianz Australian Advantage, in return for a 49% shareholding.

But last week, fresh from forming a new arrangement with QBE that saw the creation of QBE Corporate Insurances, HIH announced it was taking the $125 million minimum price for its stake in the Allianz arrangement.

Allianz had already paid HIH $200 million upfront for 51% of the business, and agreed to pay between $125 million and $500 million at any time in the next five years if HIH exercised its option to sell the remaining 49%.

The sale, announced late last week, effectively removes HIH from the market. HIH CEO Randolph Wein has additional cash and some breathing space as he prepares to announce the company’s 2000 results later this week.

AAA CEO Garry Townsend said all business forming part of the underwriting agency will now be on the basis of Allianz Australia Insurance Limited underwriting 100% of the risk from March 7.

Assets held by the trusts established by HIH under the joint venture may be used to meet consumer and commercial business claims.

“Our plan is for all IT systems to be updated to reflect the 100% Allianz underwriter status for renewals and new business effective April 21, 2001. Until then, documentation from AAA will still show the co-insurers as being the underwriters of the business, but Allianz Australia will support 100% of the risk.”