Perth-based Insured Group has sold its CEMAC underwriting agency to Austagencies, with former CEMAC owner Murray Rogash returning to help rebuild the company.

Mr Rogash has considerable incentive to see the company revive its fortunes – he is still owed $2.1 million from the January 2008 sale of CEMAC to Insured Group’s Australian Consolidated Insurance Limited (ACIL).

Under the terms of the sale to Austagencies, he will be paid out in June next year.

ACIL “reverse listed” on the NZ Stock Exchange in April after buying the shell of collapsed financial services firm Lombard and renaming it Insured Group.

In a statement to the NZ Stock Exchange last week, Insured Group MD Wayne Miller said the total purchase price for CEMAC is about $5.5 million.

He says Austbrokers-owned Austagencies will pay $3.1 million on completion, with a further payment equal to the value of CEMAC’s net tangible assets – “expected to be at least $AU200,000”.

Mr Rogash - who will work as a consultant at Austagencies - will receive the final payment of up to $2.14 million from Austagencies at the end of the financial year.

He told insuranceNEWS.com.au he will work “to build the business back up” within the Austagencies structure.

“It’s been under-resourced for two and a half years,” he said. “But it’s a great company, and working with my former staff I’m confident it will recover quickly.”

Mr Rogash received half the purchase price on completion of the sale to Insured Group, with a further 33% due in June 2009 and the remainder in January this year.

He says he feared that any attempt to sue for the outstanding money may have forced Insured Group into liquidation – in which case he would have been behind secured creditors like banks and liquidators.

“It’s been a very difficult time,” he said.

Mr Miller says in his statement that the sale to Austagencies “is in the best interests of the company and its shareholders”.

He says a shareholders’ meeting will be convened to consider the CEMAC sale “and other trade sales” – presumably a reference to the sale in September of NZ businesses Classic Cover Insurance and Tasman Insurance Consultants to major brokerage Rothbury Group.

While the CEMAC sale “enables further debt reduction” and will allow the group to focus on its WA insurance broking operations, Mr Miller says his company has no intention at present of selling any remaining subsidiaries.