IAG UK, which owns stake in broker through Equity Insurance Group, plans to sell share

Insure4retirement website

Equity Insurance Group is planning to sell a majority stake in its broker Insurance Dialogue, Insurance Times understands.

Private equity houses are already understood to be circling Bournemouth-based Insurance Dialogue, which specialises in providing insurance for over 50s and trades as insure4retirement.

Insurance Times understands that IAG UK, the parent of Equity, has decided Insurance Dialogue is a ‘non-core’ part of their business.

IAG UK snapped up a 51% stake in the company from investment firm Bridges Ventures in 2009.

Private equity firms are especially keen on buying a stake in Insurance Dialogue, which is seen as a good investment.

“It’s a market that’s subject to growth, therefore it appeals to the private equity investors, but it’s also an area which trades like, because generally the results are less volatile than elsewhere,” a source said.

An Equity spokesman said: “As a matter of course we constantly review our stakeholdings. However, it is not our policy to comment on market speculation.”

IAG UK has worked hard to slim down its business, retracting from aggregators and culling unprofitable broker relationships following a year of heavy losses.

IAG UK’s losses for the year ending June 2011 were A$181m (£115m), just over half the A$355 recorded in the previous twelve month period. The bulk of IAG’s UK business is Lloyd’s motor insurer Equity Red Star, which has suffered massively from bodily injury claims.

“Equity are always looking at the value of their shareholdings in various companies, and if they are doing that at the present time with this company that is their option,” said Insurance Dialogue managing director David Holden.