One major insurance industry player says it is thinking long and hard about whether it will stay in the UK market or flee with its tail between its legs, according to a th words of one of the company’s executives.
Insurance Australia Group’s chief executive and managing director, Mike Wilkins, said that AIG will be conducting a ‘strategic review’ of the firm’s UK arm in the face of improvement in the British economy. AIG’s UK division saw £3.2 million in losses in 2011’s second half, which may seem like reason enough to abandon the country, but this is actually a vast improvement to the second half of 2010, where the business lost
£77.4 million.
While the insurance group is still thinking over its options, they include either focusing the firm’s strategy to a specialised motor insurance offering or even selling off the entire business either in part or completely. The UK assets for IAG include stakes in Barnett & Barnett and Arista, and the group owns Equity Red Star as well.
IAG needs a return to profitability in its UK businesses, Mr Wilkins said. The insurance markets in the UK are particularly nightmarish at the moment, leading to shareholders exerting pressure upon the firm to deliver better value for money, and with the progress IAG has made in reducing the massive fountain of cash that has been flowing from its arteries in the UK, now may be the best time to re-assess the firm’s longer term plans, the chief executive added.