Fellow Icelandic company pays £600m for insurer

IGI Group is gearing up for a renewed acquisition drive after being bought out for the second time in seven months.

The insurer's majority shareholder, Vátryggingafélag åslands hf. (VÍS), has been acquired by fellow Icelandic company Exista in a deal said to be worth £600m.

Exista, which specialises in insurance and asset leasing, increased its 33% ownership of the Icelandic insurer to 100%, before floating on the Iceland Stock Exchange, ICEX , last week.

Keith Wardell, managing director of IGI Group, said: "Exista is the second largest company on ICEX, with a market capitalisation of $4.1bn.

"The company has said that it intends to be a major force in the financial services market, so from our point of view this is a fantastic development, since part of our strategy is acquisitions."

Following major investment by VÍS in February, Wardell said he expected the UK insurer to grow its current gross written premium significantly by 2009, with additional capital to support planned growth.

Following Exista's buy-out, he said: "Our stated aim is to grow in the UK and Europe, and Exista shares that view. "Given that it also has operations in London, I hope we will simply move along the same growth line as before, just faster."

Wardell also revealed that IGI is supporting a new underwriting agency being led by Ralph Brunswick, former chief executive of Isle of Man underwriting agency Templeton Insurance.

IGI pulls out of pet insurance
IGI Group has pulled out of pet insurance and will launch a travel insurance business through All Seasons Underwriting Agency instead.

The insurer sold its pet insurance business on 1 September to an unnamed carrier.

IGI managing director Keith Wardell said: "The premiums have been forced down so low now that we have pulled out because it's no longer profitable."