Zurich has agreed to sell its direct personal lines insurance portfolio to QBE as part of a strategy to focus on its intermediated insurance business.

From January the portfolio will be managed by the personal lines division of QBE, which trades as Western QBE. It will take full responsibility for renewing Zurich policies.

Zurich CEO John Butler said the discontinuance of its direct personal insurance is part of the company’s strategy to focus on core businesses in the Australian insurance market – primarily intermediated insurance.

“We are committed to developing a unique position as the leading Australian financial services group with near-exclusive focus on the intermediated insurance market,” he said. “We are focusing our energy and resources on the area of the market in which we are particularly strong and can achieve above-market growth.”

Western QBE GM Rod Tritton said the transaction is a “logical step. The product range is very similar to our own, which means that the disruption to the customer is likely to be minimal.”

Western QBE will also offer employment to “the majority” of affected Zurich employees.