IAG puts UK businesses on the table
IAG is considering offloading its under-performing British motor businesses, according to reports in the UK trade press.
The insurer has reportedly appointed a corporate adviser to investigate a possible management buyout of broker Hastings and underwriter Advantage, which it acquired in late 2006 for $350 million.
A spokesman confirmed the group has been reviewing its entire corporate structure since Michael Hawker’s departure as CEO in May and his replacement by Mike Wilkins.
“We have been reviewing all of our businesses, to ensure we are operating as efficiently as possible,” the spokesman said. “This review has included IAG’s businesses in the UK, as well as every other division.”
A Credit Suisse report issued last week says selling Hastings or placing the business in run-off is a “worst-case scenario”.
It says IAG’s other UK acquisition, Equity Insurance Group – which IAG purchased early last year for £570 million ($1.2 billion) – could generate enough income to offset any potential writedown caused by offloading Hastings.
Mr Wilkins will hold an investor conference in Sydney on Wednesday where he is expected to announce a decision on the future of the UK subsidiaries.
“Until this announcement occurs, it is inappropriate for us to comment on speculation,” the spokesman told insuranceNEWS.com.au.
In his previous role as COO, Mr Wilkins moved in April to streamline IAG’s structure by cutting its operating divisions from three to two and setting up an internet-based direct business.
The insurer has reportedly appointed a corporate adviser to investigate a possible management buyout of broker Hastings and underwriter Advantage, which it acquired in late 2006 for $350 million.
A spokesman confirmed the group has been reviewing its entire corporate structure since Michael Hawker’s departure as CEO in May and his replacement by Mike Wilkins.
“We have been reviewing all of our businesses, to ensure we are operating as efficiently as possible,” the spokesman said. “This review has included IAG’s businesses in the UK, as well as every other division.”
A Credit Suisse report issued last week says selling Hastings or placing the business in run-off is a “worst-case scenario”.
It says IAG’s other UK acquisition, Equity Insurance Group – which IAG purchased early last year for £570 million ($1.2 billion) – could generate enough income to offset any potential writedown caused by offloading Hastings.
Mr Wilkins will hold an investor conference in Sydney on Wednesday where he is expected to announce a decision on the future of the UK subsidiaries.
“Until this announcement occurs, it is inappropriate for us to comment on speculation,” the spokesman told insuranceNEWS.com.au.
In his previous role as COO, Mr Wilkins moved in April to streamline IAG’s structure by cutting its operating divisions from three to two and setting up an internet-based direct business.