State Insurance has sold its trade credit insurance business EXGO to Gerling Group, but is denying rumours its health insurance business is also on the block.
The sale of EXGO, which insures exporters and local traders against customers not paying their bills, will be completed on December 1. The business will retain its name and 11 staff, and will be strengthened by becoming part of the Gerling Group.
Gerling runs the world’s third largest trade credit insurance business, generating annual premium in excess of A$1 billion from 32 countries.
EXGO has operated in one form or another since 1965 and is second largest in the market, by premium income, to QBE.
State says the trade credit business was considered a non-core operation by its new owner, Australian insurer NRMA.
NRMA wants State to focus on "short tail" insurance products such as motor vehicle, and home and contents, a State spokesman says. Trade credit insurance is considered "long tail" like life and disability insurance.
However, the spokesman says there is no substance to rumours the health insurance business is also up for sale.
"It’s not up for sale," he says.
State has one health product, a surgical-only policy. The business has annual premium of about $2-2.5 million and is ranked about sixth or seventh in the market.
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