Groupama customer service refuses to give any information. Groupama complaints mount.

Groupama to sell brokerage and UK arm

By Alistair Gray in London and Scheherazade Daneshkhu in Paris

Groupama has put its brokerage operations and UK business up for sale as the troubled French insurer seeks to shore up its capital position.
Staff at Gan Eurocourtage, one of France’s biggest insurance brokers, and the company’s UK division were told about the planned disposals on Thursday. The businesses employ a total of 2,610 people.

More

On this story

• Asset sales boost for Axa
• OTP sells insurance arm for €617m
• Generali sells business to Groupama for €1.25bn
• Globalisation shakes Groupama rural idyll

IN Financial Services

• Buy-out groups to pay $3bn for TransUnion
• Week in review Buy-outs in bonuses fray
• Hedge fund pioneer back for Asia venture
• L&G employee arrested in trading probe

Groupama, formed from regional farmers’ mutuals more than a century ago, has been among the worst hit in the sector as a result of the eurozone debt crisis. The mutual insurer ran into financial difficulties last year after incurring losses on holdings of Greek sovereign debt and stock market investments.
Two rating agencies in September downgraded the group’s long-term debt to just above junk status, saying that management plans to build up capital to acceptable levels might be insufficient. The downgrades triggered the departure of Jean Azéma, the group’s longstanding chief executive.
His replacement, Thierry Martel, has said his priority would be “to reinforce the solvency of the Group” – mainly through cost-cutting.
Francois-Xavier Boisseau, Groupama’s UK chief executive, said told his staff in a memo on Thursday that the sale process – being handled by Deutsche Bank – would be “completed as quickly as possible” and that it would be “business as usual” in the meantime.
He said that the “current climate” had “resulted in Groupama receiving a number of spontaneous expressions of interest for some of the more profitable parts of its business.”
Groupama, the fifth-biggest insurer by premiums in France and the 15th largest in Europe, has a presence in 13 countries outside France, according to its 2010 annual report. The group is one of the top five shareholders in Société Générale, the French bank.
The UK is home to one of its largest international operations. The UK business specialises in property and casualty insurance and garnered gross written premiums of €549m in 2010.
It was not immediately clear what sum the group was hoping to fetch from the sales.
The planned sale of Gan Eurocourtage comes after Caisse des Dépôts et Consignations, the French sovereign wealth fund, injected €300m into its brokerage unit.
Groupama has also agreed merge its stake in Silic, a property company, with CDC’s Icade business in order to create a real estate company holding business parks and offices in France. Some analysts expect that restructured property group to be put up for sale.
Groupama declined to comment