Major insurer QBE sells 10% of underwriting agency

Major insurer QBE sells 10% of underwriting agency | Insurance Business

Major insurer QBE sells 10% of underwriting agency
QBE has sold a 10% stake of underwriting agency Elders Insurance (EIUA) back to agribusiness Elders, it has been announced.

In June 2014, the insurer took full control of the insurance business when Elders sold its final 10% stake in the business to the insurer as the agribusiness looked to retire debt.

Elders has now purchased the 10% holding in Elders Insurance for the same net profit after tax multiple that applied when they originally sold the stake, a statement to the ASX said.

CEO of Elders, Mark Allison, said that the re-investment in the insurance business is a demonstration of the financial plan of the business and will help improve alignment between the businesses.

“An equity stake in EIUA improves the alignment between EIUA’s franchise network and Elders’ branch network by delivering a share of EIUA’s earnings to Elders, in addition to the network access fee already paid to Elders by QBE,” Allison said.

“We are looking forward to further building upon our strong relationship with QBE and expanding EIUA’s market share of rural and regional insurance businesses.”

EIUA franchisees are present in more than 150 locations across the country and business said that the purchase price of the equity stake is confidential.