AMP sheds reinsurance business
Andrew Mohl
AMP Limited has sold its closed reinsurance and general insurance operation Cobalt/Gordian.
The company announced on the Australian Stock Exchange today that the reinsurance and general insurance operation had been sold to the Enstar Group for $585 million, with the sale including both the manager of the business, Cobalt, and the closed book portfolios, including Gordian.
It said that based on a book value at June 30, 2007, AMP would book a profit from the sale of around $83 million.
Under the terms of the sale, Enstar will assume the risks and benefits of the Cobalt/Gordian operations from July 1, 2007, with the final sale proceeds payable to AMP increasing for the period from July 1, 2007, to completion at a rate of around $3.3 million a month.
The company said that the sale represents a complete exit from the business by AMP.
Commenting on the sale, AMP chief executive Andrew Mohl said the company had generated significant value from the runoff of Cobalt/Gordian in the past few years, but it had received attractive terms and conditions from Enstar to facilitate a clean exit from the business.
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