QBE to sell NA agency businesses

QBE to sell NA agency businesses

Australia-based QBE is to sell its agency business in North America to Alliant Insurance Services for about $300m (AUD366m), of which $217m will be upfront in cash. The remainder will be paid via a performance-based earn-out over the next five years.

The businesses to be sold include Community Association Underwriters, Deep South and SIU. The deal is expected to close in February 2015.

QBE chief executive John Neal said that the move was "another important step of our capital plan in the sale of the US agency businesses at a price we consider attractive for our shareholders".

He added that an important part of the sale was the long-term agreement into which QBE had entered with Alliant under which QBE would retain the underwriting business provided by the agencies. He said that QBE was looking forward to continuing to grow its program business.

The deal is expected to close in February 2015.

QBE said last October that it was exploring options for its US operations, which have not performed well since former chief executive Frank O'Halloran extended the insurer's operations to the US in 2006. Apart from the impact of drought claims and hurricane Sandy, there were legal issues over the pricing of so-called "force-placed" home insurance, taken out by financiers but ultimately charged to the borrower.

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