Talbot Underwriting is shutting down its only Australian office in Sydney, and will service renewals through its Singapore and London branches, the AIG-owned agency confirmed today.

“We are combining our regional underwriting capabilities into a single hub based in Singapore. This unification of operations will allow us to better serve our clients’ needs,” a statement sent to insuranceNEWS.com.au says.

“Our office in Australia and Talbot Division of Lloyd’s China will now close. We intend to renew business currently written by these two offices through our Singapore and London offices. We are evaluating our crisis management/product recall strategy.”

According to informed sources, staff were told on Wednesday that the office will close on July 1, and that employees are facing redundancy.

Talbot management declined to answer questions on how many staff would be affected, or the future of Talbot Underwriting Australia MD Andrew Case.

"In instances such as these, we would always explore redeployment options as a priority for our colleagues affected by any office changes," Talbot said.

Parent company AIG declined to comment on the closure of the Sydney office, which was opened in 2015.

Talbot Underwriting CEO David Morris says the move will strengthen the business.

“With the support of our brokers and clients, our offices have built strong relationships and significant regional expertise in writing insurance and reinsurance,” he said.

“These changes to our structure will allow us to serve our clients more efficiently and bring enhanced value to all our partners in the region.”

Talbot Underwriting is part of Bermuda-based (re)insurer Validus Holdings, which AIG acquired last year for $US5.56 billion ($8.07 billion).

It writes business from its Lloyd’s Syndicate 1183, which made a $US63.7 million ($92.5 million) loss last year, according to its 2018 annual report.

Natural and man-made catastrophes impacted the business, pushing up claims after reinsurance recoveries by $US13.1 million ($19 million) to $US518.8 million ($753 million).

Talbot stopped underwriting construction and direct aviation last year.