Australia's QBE Insurance Group has announced a massive shake-up of its UK subsidiary Iron Trades, with plans to sell more than half of its £225m premium book.
The move resulted in Iron Trades immediately ceasing underwriting business for its agency base of 430 high street brokers and intermediaries.
QBE, which acquired Iron Trades in December, has decided to concentrate on the core employers' liability business.
It has closed down the UK insurer's Provincial Intermediary Division and put the £100m retail division, the £13m healthcare book and the fledgling internet motor site on the market.
The retail division is mainly personal lines motor policies.
Iron Trades, which is the fifth largest employers' liability insurer in the UK, will keep its brand identity, and the division which handles the EL book, the National accounts Division, will be strengthened.
Iron Trades chief executive Robert Hardy will leave the group at the end of June, while the current National accounts Manager Brian Jepp will retire at the end of this month.
QBE Chief executive Frank O'Halloran said that QBE will retain about A$200m (Australian dollars) of the A$475m of premium income written by Iron Trades in 1999.
He added: "The possibility of the closure of the Provincial Division and sale of the Retail and Healthcare divisions was identified during due diligence and was reflected in the purchase price.
"We needed a few months to assess the best option for our shareholders."
The Provincial Intermediaries Division wrote a total of £38.6m of premiums in 1999, of which the largest class was property (£12.8m) followed by public liability (£9.5m) and then employers' liability (£8m).
Its closure has placed 125 jobs under threat and the shutting down of offices in Glasgow, Belfast, Manchester, Birmingham, Reading and Bristol.
A QBE spokesperson said the company will try and save as many of the jobs as possible, but admitted the majority are likely to be cut.
QBE will handle the run-off of for the intermediary business. Claims handling for both the run-off and the ongoing national account book will be centralised in Leeds.
Mike Williams, chief executive of broker trade body Biba, was dismayed at the loss of more choice for the broker market.
"It is a sad day for brokers, but a predictable one after the take-over was announced," he says.
"QBE has always been a specialist and London market insurer."
Iron Trades National account Division will now be split into two: Corporate Risks and Commercial Risks.
Corporate Risks will focus on the larger clients with specific servicing demands, while Commercial Risks will offer more standard cover.
Giles Quartly is appointed the manager of Corporate Risks and Peter O'Neil is appointed manager of Commercial Risks.
A statement from QBE read: "The Provincial Intermediaries results have been unprofitable for some time and even prior to the acquisition by QBE, Iron Trades management had been seriously considering closure because of poor results.
"The review has concluded that with our existing market penetration and product base, the business could not be converted to a viable entity in a realistic time span."