Australian insurer IAG is in talks to offload its troubled UK operation, but Equity Red Star is not the only proposition out there for hungry buyers
The latest chapter in the story of Equity Red Star unfolded this week as news emerged that IAG was in talks with potential bidders for its UK business.
Having announced a strategic review of its UK operations in May – which it bought for £540m seven years ago – to determine its future, IAG revealed it was looking at a potential sale of all or part of the business.
And in a telling statement released yesterday, the Australian insurer said that while it was speaking to a number of interested parties, no sale agreement had been reached yet.
It is an encouraging development for IAG, which has been looking at offloading the troubled Lloyd’s motor insurer for some time.
The only question is, once acquired, whether any buyer would put Equity Red Star into run-off or retain it in the hope of reaping the benefits of having gone through the re-reserving process.
In addition, a more profitable motor market could be an added incentive to acquire the business.
Beyond Equity
Arguably a more attractive proposition is IAG UK’s broking arm Barnett & Barnett, which is believed could be the subject of a management buy-out (MBO) led by managing director Neil Campling.
An added bonus for any takeover would be broker NBJ’s book, which Barnett & Barnett bought in 2010 and has doubled its GWP to around £50m.
If Barnett & Barnett’s MBO fails, with the likes of acquisition-hungry consolidators such as Towergate, Giles and Oval on the prowl, it may not be long before it is snapped up.
RSA signs up to the MGAA
Another significant development today was RSA’s decision to sign up to become a member of the Managing General Agents’ Association.
The insurer signed a £75m deal with Gallagher UK underwriting agency OIM in May in a statement of intent as it looks to ramp up its MGA activities.
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