Fortis Sells Australian Unit to CGNU

Australia’s AMP confirmed ongoing rumors that it would sell its general insurance business by closing a deal the Queensland-based insurance and financial group Suncorp Metway Ltd., which agreed to buy all its holding for A1.4 billion ($733 million) in cash and securities.

It also announced that it had agreed to sell its U.K.-based operations to Churchill Insurance, a subsidiary of Credit Suisse for A$211 million ($110 million), and is currently in negotiations to sell its New Zealand operations as well.

The sales include both AMP’s wholly owned business, most notably the operations of GIO which it acquired in 1999, and several joint ventures with other insurers and the Automobile Clubs in Queensland and South Australia.

Suncorp Metway will assume the risks, and the profits and losses, as of July 1. The deal is subject to regulatory approvals, and is expected to formally close by the end of September.

AMP management indicated the move was necessary due to rapidly changing market conditions, and that it’s future strategy would be to concentrate on Life products and financial services.