QBE Reportedly In Talks To Buy Zurich’s General Insurance Business

QBE Insurance Group is believed to be negotiating the acquisition of the general insurance unit of Zurich Insurance Group AG, excluding the firm’s travel arm.

Reports suggest Goldman Sachs and PwC are handling the transaction, with the business valued at around US$500 million ($700 million). However, Zurich may elect to sell the contract renewal rights which would greatly impact that figure.

QBE Chief Executive Andrew Horton reportedly wants to expand the group’s home and motor insurance lines, fuelling speculation of his group’s interest in Zurich.

Insurance Australia Group (IAG) is also said to be interested in purchasing the business, but Macquarie Insurance Analyst Andrew Buncombe reportedly played down the speculation.

“I don’t think investors would welcome IAG buying another book at this point before it has fixed its own,” he said.

However, as a major commercial underwriter of general insurance in the Australian market, industry analysts believe Zurich would attract significant interest from other big players, even if it doesn’t fit with their current priorities.

Reports also suggest other companies, such as Chubb, Liberty, Berkley and AIG, as well as tier two insurers, may be interested.