IAG to take £157m hit as it exits UK

City A.M. Reporter
Australian insurer IAG this morning said it expects to incur a loss of A$240m (£157m) on the sale of its British operations.

The insurance company will sell its Equity Red Star motor unit for £87m to Aquiline Capital Partners, a private equity investment firm specialising in financial services, and the smaller specialist commercial broking business Independent Commercial Brokers for an undisclosed amount.

After investigating all other options for the UK business, IAG managing director and chief executive Mike Wilkins said today that "the sale option delivers the best available outcome for IAG shareholders, particularly in light of the continuing challenging economic and industry conditions in the UK market".

He added that the sale allows IAG to focus on home operations in Australia and New Zealand, while expanding their Asian footprint.