AMP is having a terrible year, but that doesn’t mean it’s going to sell off its assets cheaply. That appears to be the thinking behind CEO Andrew Mohl’s decision to hang on to his company’s unwanted reinsurance businesses, Cobalt and Gordian.

After negotiations with Swiss Re broke down – talks were said to involve a reinsurance arrangement rather than a straight trade sale – Mr Mohl announced the group would hold on to the business, which is worth $725 million, as there have been no appropriate offers.

“None of the proposals to date have reflected the inherent value of Cobalt/Gordian as they would give away all the upside but provide continuing exposure through indemnities and warranties on sale, or a contingent exposure through a reinsurance agreement,” he said.

Market speculation suggests the move may hinder the group’s demerger plans and affect the appeal for potential acquirers.

Last year Cobalt/Gordian, the last vestiges of AMP’s ruinous GIO play, produced operating margins of $27 million in the six months to June.  Cobalt – which manages Gordian – is running off its existing policies.

“We are not prepared to enter into a transaction unless it delivers at least the value of the business to AMP,” Mr Mohl said.