Alea London, a subsidiary of the Alea Group, is to sell the renewal rights of part of its London-based facilities insurance and reinsurance business to Canopius in a deal expected to be in the range of $8m to $12m.
The agreement includes cash payments of 5% of gross premiums written between completion of the deal and 31 December 2007.
This is offset against cash payments of up to $2.5m payable January 2006 and January 2007 in each case depending on the level of premium expected.
Alea said the consideration for the deal would be capped at $30m.
For the full year 2004, the book of business generated $222m in gross premiums written and underwriting profit of $14.6m before allocation of central corporate expenses and before the impact of aggregate excess contracts.
Canopius expects to target for renewal specific MGA contracts within this portfolio reflecting business consistent with its strategy.
Alea said its remaining London-based operations will be placed in run-off as soon as practical and that discussions with potential buyers for certain remaining parts of the Group are continuing.
As a result, the company said it is entering into consultation with its 125 London-based employees regarding their contracts of employment with the potential for redundancies.
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