14 Feb 2018

CBL Insurance to exit French construction business

12:11 pm on 14 February 2018

Specialist insurer CBL Corporation has decided to quit its French construction business.

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Photo: 123rf

Last week, CBL, which offers special insurance products for the building industry, asked for a share trading halt as it warned of big losses and the likely need for extra cash because of problems with some of its European business.

In a statement released to the NZX overnight, CBL said while the French business was profitable, it had long-term risks because of estimates for future claims and the need for high levels of capital.

"As a result, the Board of CBL has today decided it will exit its French Construction Business to ensure it is able to deliver ongoing value to shareholders as well as a higher return on equity," the statement said.

The company said it would focus on core business products that had shorter terms and would not require as much capital.

"Given the French Construction Business is profitable, all exit options are being considered including a sale of the insurance book as well as the distribution and operational networks of the Managing General Agents, EISL and SFS, on a going concern basis."

The exit would take up to 90 days. CBL said it was appointing advisors to manage the process.

CBL still needs to announce details about a planned capital raise.

It will release its financial results later this month.

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