Aquiline Capital Partners, a private-equity firm led by the son of former AIG boss Hank Greenberg, has snapped up Lloyd’s of London insurer Equity Red Star for £87 million.
The deal will see Equity’s owner Insurance Australia Group (IAG) dispose of an asset that has been loss making for several years.
The motor insurer has been hit by personal injury claims and in January narrowly avoided a £1 million fine from the Lloyd’s market following an investigation into its underwriting procedures.
The agreement also ends a bidding war between Aquiline and City entrepreneur Edi Truell. Truell, the founder of private-equity house Duke Street, had been granted preferred bidder status for Equity as recently as last month, but talks between him and IAG collapsed over price.
Mike Wilkins, IAG’s chief executive, said: “We believe 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.
“It also allows us to concentrate on our strategic priorities of accelerating profitable growth in our home territories of Australia and New Zealand, which in the 2012 financial year represented over 90% of the group’s premiums, and on increasing our Asian footprint.”
