IAG’s decision to sell its Accident and Health International Underwriting (AHI) agency to Tokio Marine is a good illustration of changes taking place across the industry.

As insuranceNEWS.com.au reported this morning in a Breaking News bulletin, Tokio Marine is keen to expand its activities in the region.

At the same time, IAG is confining its activities to the Australian and New Zealand markets, and sources have told insuranceNEWS.com.au that AHI’s business was not seen as a key product line for the insurer.

“If the focus to build the business isn’t there and the price is right, the deal is a good one for both parties and for AHI,” one manager working in the sector said.

Tokio Marine Management (Australasia) CEO Shigekazu Ueno says the acquisition combines AHI’s accident, medical and corporate travel specialties with the Tokio Marine’s financial strength and global reach.

“This acquisition presents attractive opportunities for the group to grow and expand these lines of business across the Oceania region and beyond,” he said.

AHI opened its first office in Sydney in 1998 and has since expanded to Melbourne, Perth and Brisbane. IAG acquired 50% of the business in 2010, and bought the remaining 50% in 2015.

“While IAG has enjoyed a rewarding partnership with AHI, we recognised there is an opportunity for AHI to expand beyond IAG’s focus of Australia and New Zealand and that Tokio Marine is a more natural owner of AHI to support its growth ambitions,” Executive Manager Broker and Agency Brad Robson said.

The Australian-based subsidiary of Tokio Marine & Nichido Fire Insurance offers commercial and personal lines and has more than 140 employees and representatives across offices in Australia and New Zealand.

In April it acquired specialist underwriting agency Bond & Credit Company, which produced gross written premium of $36 million in the 2018 financial year. That business employs 24 people and has offices in Sydney and Melbourne.

The purchase prices for the acquisitions were not disclosed.