IAG SAYS ACQUISITION FOCUS SHIFTING FROM ASIA TO EUROPE

Insurance Australia Group (IAG), Australia’s largest insurer, has shifted its focus for offshore acquisitions from Asia to Europe, according to Michael Hawker, speaking as the company revealed a fall in consolidated net profit for 2005/06 to A$759m from A$781m in 2004/05. “After two years of investigating Asia we had built and were able to start focusing on securing acquisitions, which we have seen come through over the past year”, said Mr Hawker. The company has bought businesses in Thailand, Singapore and Malaysia and recently signed a deal to buy a stake in China Pacific Property Insurance. However, Mr Hawker observed that “the challenge we have with our Asian businesses is because they are minority owned it is very hard to see the value of them coming through the balance sheets”. In fact IAG has a 98% majority control of Thailand-based Safety Insurance Public Co, while it has a 30% stake in Malaysia’s AmAssurance. It also provided the majority of capital in the formation of Lloyd’s agency operation Alba.