Feb 16 (Reuters) - Australia's QBE Insurance Group Ltd sold three agency businesses to broker Steadfast Group Ltd for $225 million, giving its smaller rival the country's largest group of underwriting firms as it seeks to repair its balance sheet.
After flagging widespread sales in August, Australia's biggest insurer said on Monday it sold its CHU Underwriting Agencies Pty Limited, Corporate Underwriting Agencies Pty Limited and Underwriting Agencies of Australia Pty Limited to Steadfast.
The A$290 million is an up-front cash price but the final price will be based on the businesses' performance in 2015 and 2016 and will potentially be as high as A$348 million, QBE said.
The sale advances QBE's widespread plan to cut debt after a foray into the United States, where it now gets a third of its premium revenue, left the company over-exposed to insurance payouts.
It also frees the company to focus on other aspects of the divestment plan it unveiled in August along with an 18 percent decline in half-year profit. That plan includes a share market listing of part of its mortgage insurance business and raising $750 million in a share placement.
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