The future of Lloyd's underwriting agency Creechurch is unclear after sister company, Hastings Insurance Services, was sold to Insurance Australia Group (IAG) for £140m this week.

Creechurch was not part of the sale and its future is yet to be confirmed.

Creechurch is part of the Logan Trust Group which also owned Hastings.

The acquisition will make IAG a major player in the private motor market.

IAG said: "We are buying a successful specialist company, which has grown very strongly in a competitive mature market and with enormous growth potential."

The Australian group also purchased Gibraltar-based Advantage Insurance, a direct personal lines provider which previously sat on Hastings' panel.

Advantage is expected to write £100m GWP by the end of 2006.

The purchase price was 1.2 times net assets for Advantage and 10.5 times the anticipated called year 2006 earnings for Hastings.

IAG, which reported gross written premiums worth £2.53bn at the year ended June 2006, plans to grow by between 5% and 10% by June 2007.

Hastings is expected to contribute 3% of the forecast growth.

IAG chief executive Michael Hawker said: "Our strategy in mature markets like the UK is to target successful businesses, primarily in motor, where we can access new markets."

Hastings was unavailable to comment on Creechurch.