The sale of Groupama UK has been stopped by its French parent company.
In a shock move, managing director of personal and commercial lines Tim Ablett said that the French head office has given the UK company a five-year guarantee of backing. Ablett said he was not surprised by the move. "Nothing shocks me in business anymore," he said.
It is understood that the move has been made in reaction to the current hard market. A senior market analyst said: "Groupama can obviously see there is money to be made in the UK market with rates hardening and want to make hay while the Sun shines."
HSBC analyst David Hudson agreed that the French parent could be eyeing up a UK market with excellent prospects or that Groupama could not realise the full price it wanted for the business.
Chairman and chief executive Tony Lancaster and Stephen Hartigan have left the company. A new chief executive is being sought and an announcement will be made in a few weeks said Ablett.
Ablett has taken on the commercial lines of the business, along with his existing personal lines portfolio.
Temporary charge of the company will be taken by Jean Paul Bouquin who came over from the French business in October 2001 to advise on the portfolio transfer. Bouquin has been with Groupama for 30 years and was group director of planning and control.
As well as all negotiations with suitors being called off, the portfolio transfer that would have split up Groupama's continuing and run-off business has been halted.
It is understood that the UK business was to be sold to Allianz or AIG. An announcement was due at the end of the first quarter of this year.
Staff briefings to explain the move began this morning at 1030am.
