Just days after they were reportedly considering buying into an asian insurer, Insurance Australia Group (AIG) have agreed to buy New Zealand’s AMI Insurance Ltd. for NZ380 million (GBP192 million).
AMI was in dire financial straits and had to be bailed out by the government this year after an earthquake prompted almost NZ2 billion (GBP982 million) dollars worth of claims.
In the deal, AIG will not be liable for any past of future claims relating to the earthquake. Any earthquake related claims will now be dealt with by a new state-owned company.
The deal will make AIG the biggest general insurer in New Zealand and will add almost 30 per cent to its New Zealand premium income and yield $30 million a year of net synergies within the first two years, the company said.
The deal had an obvious effect on Australian stock exchange, prompting the end to three days of losses.
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