Cgnu has suddenly quit the global risk insurance market and placed its existing business into run-off after admitting it would fail to achieve a leading position in the sector.
Group chief executive Bob Scott revealed the decision to a select group of insurance analysts, following the group's disappointing half year results on Wednesday.
The market serves UK-based multi-national companies by placing their overseas risks in the London market.
Last year, CGNU earned a premium income of £80m from 150 clients. No figures are available on profit or loss.
A CGNU spokesman said simply: “We do not believe that it is worth spending resources to get a leading position in the global risks market when this is not a realistic proposition.”
However, he stated that the move should not be seen as the first step in CGNU withdrawing from the wider commercial insurance market.
The spokesman added that CGNU wanted to focus on its key UK client base of small and medium-sized companies and personal lines.
CGNU moved quickly to reassure the 160 staff at CGNU's global risks division in Leeds and Basildon.
The spokesman said that their jobs were safe, at least for the long tail period of its run-off.
A source close to CGNU said the former CGU had found it difficult to make a sustained profit from the market, which has a reputation for turbulence.
He said this was because premiums were depressed and cover was written too widely to guarantee a profit in the long term. In addition, the growth of alternative risk transfer had pushed away much of the market's more lucrative business.
The source commented that CGNU simply could not match the market's major players, Zurich Financial Services and AIG, and had simply decided to pull out.