Troubled insurer HIH, which owns Lloyd's syndicate HIH Cotesworth, is selling its 49% interest in its Australian retail insurance venture with Allianz for an estimated Aus$125m (£43.3m).

The move comes after HIH plunged an estimated Aus$500m (£173m) into the red.

This week QBE Insurance announced that it is to throw a lifeline to its struggling rival HIH by agreeing to form a joint corporate insurance venture.

An HIH spokesman said: “Australian corporate insurance is the core business on which HIH was founded.”

Australia's corporate watchdog, the Securities & Investment Commission, is investigating whether the company kept the market adequately informed of its trading positions. HIH shares have been suspended since March 1.