Avea Insurance has acquired IAG-owned Swann Insurance’s distribution rights for franchise motor dealers, and will rebrand as Eric Insurance from July 1.

The two companies confirmed the transaction to insuranceNEWS.com.au, but declined to reveal the sale price, citing confidentiality reasons.

The transaction is expected to be completed by the end of next month.

Avea Insurance Marketing Leader Ryan Christie says the purchase will bolster the general insurer’s position in the motor vehicle underwriting business.

“It fast-tracks our strategic ambitions to deliver to the market leading product development, technology and innovation… superior training and support,” Mr Christie told insuranceNEWS.com.au.

“This allows us to have a more extensive network with car dealers and finance brokers.”

Avea CEO David Pemberton, who joined the company in 2009, was a senior manager at Swann Insurance between 1990 and 2002. He has worked in the automotive insurance industry for more than 30 years.

The sale will allow Swann to focus on its core businesses, a spokesman told insuranceNEWS.com.au.

“Swann is going back to its heritage, focusing on providing insurance to motorcycling enthusiasts and building on its offerings in leisure products, such as boats and caravans.

“As a result, Swann has sold the distribution rights to its franchise motor dealers, finance brokers and salary packaging companies to Avea Insurance.”

Eric Insurance has set up a corporate website and published a YouTube video to outline its ambitions.

It says Eric is “a new brand to disrupt the industry, turn heads and provide endless possibilities for the future”.

The Melbourne-based insurer’s product offerings include motor vehicle, bill reimbursement, consumer credit, guaranteed asset protection, loan termination, return to invoice, total asset, warranty and tyre and wheel, according to its website.

Avea Insurance made a net profit of $4.21 million and underwriting income of $10.24 million in the year to June 30 2015.