Insurer ponders sale or overhaul

Insurer ponders sale or overhaul

Insurer ponders sale or overhaul

Insurance Australia Group Limited (IAG) has announced  it is undertaking a strategic review of its UK business, which has seen signs of recent improvement.

During the six months ended 31 December 2011, the UK business reported an insurance loss of $5 million, compared to a loss of $121 million in the previous corresponding period.

With the business’ remediation program continuing and early signs of government action on necessary industry reform, IAG felt it was the right time to assess.

IAG then outlined the options it maybe pursue:

  • a continuing focus on improving the business’ performance within the current operating model
  • refining the business’ strategy to a more focused specialist motor offering
  • explore options for a potential sale of all or part of the business.

While those options are not exhaustive, they are the leading notions at the current time.

“One of our key strategic priorities is to return the UK to profitability,” said IAG managing director and chief executive officer, Mike Wilkins.

“Given the progress towards that goal in the opening half of the current financial year, we believe the time is right to consider our longer term plans for the business, and the best way to maximise shareholder value.”

An update on the strategic review will be reported by IAG’s full year financial results in August 2012.

What do you think it will pick?