After fighting hard to acquire it, AMP, Australia’s largest life insurer and fund manager, may be seeking to divest itself of GIO, the distressed property casualty insurer it took control of in 1998 at a cost of nearly A$3 billion ($1.56 billion), says a report in the Australian Financial Review.
Although AMP refused to comment on the speculation, it appeared that the huge losses, A$1.1 billion ($572 million) last year, which AMP has experienced in trying to integrate GIO with its own general insurance operations, have finally become too much.
The combined operations are estimated to be worth around A$1.65 billion ($858 million) and could be sold to Australian insurer NRMA, which is currently the country’s largest p/c insurer. That in itself could cause regulatory problems according to industry observers.
A sale to a foreign buyer hasn’t been ruled out with CGNU, Royal & Sun Alliance and Zurich Financial being the most prominent companies named.
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