Market speculation that Gallagher is selling its Pen Underwriting operation in Australia might have been correct recently, but not any more.

insuranceNEWS.com.au has been assured by informed sources that the operation did go through a pre-sale process recently, but Gallagher President and CEO Pat Gallagher vetoed it.

Speculation on an impending sale has been moving through the market over the past few months, with one insider telling insuranceNEWS.com.au today the company has “put the complete screws on new hires, expenses, etc”.

Although the brand is believed to have struggled in the local market for several years, its operations in other parts of Gallagher’s global empire have been profitable. It’s understood this was one major reason Mr Gallagher gave for holding on to the Australian operation.

Pen Underwriting in Australia was managed from London when it was formed in 2014 from Australis Group Underwriting and SRS, which at the time of its sale to Gallagher in 2012 was the largest Lloyd’s underwriting agency in the local market.

As insuranceNEWS.com.au reported in an Analysis in 2017, SRS lost much of its established international broker business when Gallagher bought the OAMPS brokerage for $1.01 billion 17 months after buying SRS.

Two years ago the previous owners of SRS mounted a legal action over their final payment from Gallagher. The matter was recently settled out of court under confidential terms.

Gallagher was unavailable for comment.