Broken Hill Proprietary Co Ld
3 December 1999
BHP SELLS STAKE IN WORLD MARINE & GENERAL INSURANCES
The Broken Hill Proprietary Company Limited (BHP) today agreed to sell its 70
per cent stake in general insurer World Marine & General Insurances Pty Ltd
(WMG) to HIH Insurance, a major Australian-based insurance group.
BHP Services President Kirby Adams said the sale of BHP's interest in WMG
resulted from the Company's ongoing restructure of its global asset portfolio
to ensure it delivered maximum value to shareholders and BHP Services'
commitment to focus on activities which were central to supporting BHP's key
business objectives.
'The portfolio review process determined that the retail insurance business
was not core to the Company's portfolio. However BHP Services will retain
in-house expertise in insurance as a critical element in risk management.'
Italian-based insurance company Assicurazioni Generali SpA (Generali) holds
the remaining 30 per cent shareholding in WMG and is also selling its stake in
the general insurer to HIH Insurance. WMG's current employees will transfer
to continuing employment in the HIH Insurance group.
Mr Adams said the agreement between BHP, Generali and HIH Insurance will
provide certainty for WMG's clients and ongoing employment for WMG employees
in a larger, well-recognised insurance business.
Completion of the sale is subject to approval by the Australian Prudential
Regulation Authority (APRA) and is expected to be completed by the end of
December 1999.
Media Relations: Mandy Frostick, Manager Media Relations
BHP Group - Melbourne
Tel: +61 3 9609 4157
Maree Arnason, Manager External Affairs
BHP Services - Melbourne
Tel: +61 3 9609 2411
Investor Relations: Dr Robert Porter, Vice President Investor Relations
Tel: +61 3 9609 3540 - Melbourne
NB: Attached is background on World Marine and General Insurances and HIH
Insurance.
BACKGROUND NOTES
WORLD MARINE AND GENERAL INSURANCES PTY LTD
. Formed in 1951 as a public company, operating in general insurance market as
Vanguard Insurance Co Ltd.
. Assicurazioni Generali SpA have held a stake in the company since 1955, and
became sole owner in 1988. Generali then sold 70% of shares to BHP in January
1989. The company was restructured and renamed World Marine and General
Insurances Ltd in 1990, and became a proprietary company in 1994.
. WMG has operated profitably since 1991.
. BHP's stake is held through subsidiary BHP Marine and General.
. WMG is a general insurance operation, with its main focus on: motor (private
vehicle and small commercial fleets); household (building and contents);
marine (hull and cargo); and other small business cover.
. Key customers are BHP employees (about 25% of the total customer base), the
Over 50s Friendly Society, and a range of brokers and agents.
. WMG's head office is in Melbourne, with branches in Sydney, Melbourne,
Brisbane, Adelaide, Perth and Darwin.
. WMG has 35 employees, many of whom have been with the company since it
joined the BHP group in 1989. All employees will be offered continuing
employment as WMG's ownership transfers to the HIH Insurance group.
HIH INSURANCE
. HIH is one of Australia's largest general insurance groups with recognised
brands including CIC Insurance and FAI Insurance. It has substantial
strategic alliances with a network of financial institutions, brokers, direct
marketing and e-commerce, and offers a diverse range of innovative insurance
products and services to all areas of industry and to the wider community.
. Based in Australia, the HIH group also has operations in the United States,
United Kingdom, Argentina, New Zealand, Malaysia, Guam, Thailand, Philippines,
Hong Kong, China and South Korea.
. HIH Insurance is listed on the Australian Stock Exchange and has annual
premium revenue of around A$3 billion and total assets near A$8 billion.
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