Suncorp has forecast an after-tax profit of between $110-125 million on the sale of its stakes in two insurance joint ventures held with motoring organisations in SA and Queensland.

The group surprised the market in February by deciding to divest its 50% stakes in the profitable insurance operations of Royal Automobile Association of SA (RAA) and the Royal Automobile Club of Queensland (RACQ).

Both joint ventures operated as stand-alone entities, with distribution through the RAA in SA and RACQ in Queensland.

According to a statement lodged with the Australian Securities Exchange last week, Suncorp’s interests in the joint ventures have been independently valued at a combined total of $348 million.

This falls neatly in line with a forecast made in late February by Credit Suisse analyst Arjan van Veen, who told insuranceNEWS.com.au the sales were likely to fetch between $320-380 million.

The insurer aimed to complete both transactions by the end of August. Last week it revealed the RACQ transaction remains subject to regulatory approval.

Suncorp Group CEO Patrick Snowball says while the joint ventures “have proven to be good investments for Suncorp, the next phase of our development requires a full-time focus on our core operations”.

Suncorp expects both transactions will be reported as part of its financial results for the year ended June 30. The company says the divestment of its interests will not impact its ability to compete in SA and Queensland.