Elders has completed the sale of its insurance businesses to QBE and will use the $270 million to pay down debt.

Under terms of the deal announced on July 31, QBE acquires Elders Insurance underwriting and distribution operations.

The insurer now owns 75% of a new joint venture underwriting agency and 100% of Elders Insurance.

The joint venture will continue to supply insurance under the Elders brand and holds the exclusive distribution rights for 20 years. Elders Insurance MD Tim Plant will run the venture.

Elders has retained an option to increase its 25% stake in the joint venture by a further 25% after the company completes its accounts in 2010, 2011 and 2012.

Elders MD Malcolm Jackman welcomed the long-term commitment of QBE to the joint venture arrangement.

He says the deal provides a more competitive offering for clients and better growth prospects for the business.

“We are shifting our focus from ownership and control to a business model where we focus on growth and returns through participations in aligned partnerships with industry specialists,” he said.