Cheap Groupama sale 'out of the question' - Boisseau

Groupama UK chief executive François-Xavier Boisseau has warned potential bidders that it is “out of the question” to sell the business on the cheap.

Boisseau was speaking after Insurance Times revealed today that French insurer Groupama will soon begin a sale process for its UK insurance arm, which Boisseau runs, as well as UK broking assets Bollington, Carole Nash and Lark.

He said Groupama had received an unsolicited approach for the business, but declined to reveal who made the bid.

Boisseau said: “The sale process will start very soon. The group will decide on the quality of the offer, and if it will conclude the sale.

“What is very true is that the group appreciates the value of its UK operation. When we publish the results for 2011, they will show again a very significant increase in profit and demonstrate that the UK is a valuable asset to the group. For the group, it is out of the question to undersell its UK assets.”

Groupama’s group financial strength rating from rating agency Standard & Poor’s currently rests one notch above junk status at BBB-. The group has been bitten by the eurozone crisis as it holds Greek debt and depressed shares in French companies.

However, Boisseau assured brokers that Groupama’s UK business was sound.

He said: “The message I’m also giving to the broker, our customer, is that it’s clear that we’ve been working very hard over the last two to three years to make sure we manage the underwriting cycle by delivering profit. We have been very innovative in a lot of territories and for us, it’s business as usual. You can be confident that, locally, we have a very strong solvency margin of 190%. Brokers should have no worry about the strength of the UK operation.”