CGNU moves to sell French arm

INSURER CGNU has taken another step towards ridding itself of big-ticket general insurance exposures by entering exclusive negotiations with Groupama for the sale of its French business.

Analysts believe that the business, CGU Courtage, which sells premiums through brokers, is worth up to £300m. It is expected to report an operating profit of £24m for 2001 but to be left with substantial underwriting losses as a result of the storm damage suffered at Christmas.

CGU Courtage is small by CGNU standards, but the decision to sell the business was welcomed by the market as evidence of the group's willingness to quit markets in which it has little influence. CGNU plans to retain its interest in smaller general insurance lines, such as home and car cover, but no longer wants to be exposed to potentially-expensive industries such as aviation and commercial property.