Norwich Union Healthcare has consolidated its position in the healthcare market by snapping up CGU's OHRA private medical insurance business.

The acquisition marks another step in the consolidation of CGU and Norwich Union, which merged to form CGNU last June.

Norwich Union Healthcare is the bigger partner, with 600,000 customers compared to OHRA's 25,000.

CGU's PMI business, which has a premium income of £6m, will officially transfer to Norwich Union on January 1, 2001. In the meantime, OHRA will be run jointly by Norwich Union Healthcare and OHRA management.

A review into OHRA's policy sales and administration – most of which are sold through brokers – has begun

Tim Baker, Norwich Union Healthcare commercial director, said it is committed to developing the OHRA business. He said: “We will be contacting key intermediaries to discuss the continuing service of their OHRA portfolios and future developments.”

But only four of OHRA's 16 staff at its UK base in Eastleigh, Hampshire, will take new roles with Norwich Union Healthcare. Twelve turned down the offer and accepted positions elsewhere.

In a separate move, Norwich Union Healthcare has announced plans to recruit 20 new staff for its customer services department in Sheffield.