Zurich Australia has now officially taken over CGU’s share in Associated Marine. While the industry has accepted the change that sees Associated Marine becoming a one-owner insurer, there has been some shock at the price Zurich paid for CGU’s share – just $250,000.

After IAG’s 2002 acquisition of CGU, Zurich argued that its joint venture with the company in Associated Marine was void. A court agreed that the JV arrangement meant Zurich could terminate the JV at any time.

No one’s saying who told the Australian Financial Review about CGU’s $250,000 payout for its share in the $100 million-plus company, and neither Zurich nor CGU will confirm the figure. But it is certain that both sides are a tad embarrassed by the disclosure of the payout as much as by just how paltry it is. That’s because the figure is based on Associated Marine’s net tangible assets of $500,000.

Following CGU’s announcement that it will set up a new marine insurance company in the next couple of months, both companies flexed their corporate muscles last week and revealed their determination to be market leaders in the field. Zurich CEO John Butler says he is confident the move will position the group as “the clear leader in the marine insurance market”.

“The acquisition of Associated Marine reflects Zurich Australia’s strategic positioning and underlying general insurance business strategy,” he said. “Our focus is on the SME market and speciality business lines and this further addition to the portfolio complements the existing approach.”

CGU said in a statement that it hopes its new business – which remains nameless at this point – will become a leading marine insurer within three to five years. “We intend to utilise our extensive distribution network and longstanding relationships with major brokers to maximise distribution opportunities.”