CGNU SELLS MARLBOROUGH AGENCY TO BERKSHIRE HATHAWAY

The UK’s largest insurance group CGNU today announced the sale of its Marlborough Underwriting Agency and exit from the Lloyd’s insurance market. CGNU said that it was selling the Lloyd’s agency to US-based insurance and investment holding company Berkshire Hathaway, which will also undertake, subject to Lloyd’s approval, to replace CGNU as provider of capacity to the Marlborough-managed syndicates for 2001. CGNU noted that it would take a £448m one-off charge before tax in its results for the nine months to end-September because of its exit from the market and associated reinsurance protection. The group added that the sale of Marlborough Underwriting Agency completed the repositioning of its general insurance business. Meanwhile, Berkshire Hathaway has acquired a 19.9% stake in Bermuda-based White Mountains Insurance for $300m, a sum that will be used to support White Mountains’ recent agreement to acquire CGU, the Boston-based US p/c subsidiary of CGNU.