CGU has bought 50% of major underwriting agency Accident & Health International (AHI).

The business, which sells business and corporate personal accident, medical and travel insurance through brokers, is based in Sydney and has offices in Melbourne and Brisbane.

The sale to CGU has come as a surprise to the market, because AHI is closely linked to Allianz Australia, which has underwritten its business since 2003.

It’s understood Allianz was one of several companies interested in buying the business, but was outbid by CGU. The final amount has not been divulged.

CGU spokesman Iwona Polski says the insurer will operate AHI at “commercial arms length”, with founder and MD David Epper continuing to run the business.

“The acquisition makes strategic sense for CGU as it complements our offering and is part of our strategy to grow our corporate business,” she told insuranceNEWS.com.au.

Mr Epper says he sold half the business after a number of approaches from insurers. “At first I didn’t want to sell, but I agreed to the deal with CGU provided I could keep running the company,” he told insuranceNEWS.com.au.

Renewals of AHI cover will transfer from Allianz to CGU from January 1 next year.