International insurer sells US agency business
Australian insurer QBE has agreed to sell its US agency business, it was announced today.
According to terms of the agreement, Alliant Insurance Services will make an up front cash payment of $217 million to QBE for the sale of the business, which includes Community Association Underwriters (CAU), Deep South and SIU.
The remainder of the $300 million agreement will be paid through a performance-based earn-out agreement over the next five years. The insurer also reached a long-term agreement to retain the underwriting business provided by the agencies.
QBE Group CEO John Neal praised the deal as an important step forward for the company.
“We are pleased to announce the progression of another important step of our capital plan in the sale of the US agency business at a price we consider to be attractive for our shareholders,” Neal said. “An important element of the sale is the long-term agreement that we have entered into to retain the underwriting business provided by the agencies.
“We look forward to continuing to grow our program business and to working with Alliant and CAU, Deep South and SIU.”
The sale is expected to close in early February 2015.
QBE first announced it was looking for a buyer for the business last year. The news follows in the wake of the revised ratings for QBE from AM Best which affirmed the company’s financial strength and revised the outlook of QBE from ‘negative’ to ‘stable'.