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Insurance Australia Group (IAG) will restructure its Australian and New Zealand business to deliver A$130 million ($165 million) in savings a year, as it winds back its operations in the United Kingdom.
IAG will continue to pursue growth opportunities in Asia, focusing on Thailand, Malaysia, India and China.
But it will conduct a staged exit of the private motor and mass market distribution operations of Hastings/Advantage and Equity Insurance Brokers and exit its Alba and Diagonal investments businesses in the UK.
About 600 jobs, or about 5 per cent of IAG's workforce, are expected to be cut as part of the cost savings.
The decision means the group will book a non-cash impairment charge of around A$350 million in fiscal 2008.
"It's clear from our recent financial performance we need to do better," chief executive Michael Wilkins said.
He said IAG aimed to have a more tightly-managed portfolio of high performing, customer-focused and diverse general insurance businesses.
It would simplify its operating structure, creating end-to-end businesses with autonomy to manage their own brands, customer bases and markets.
"We'll also stay focused on the fundamentals of our business in Australia and New Zealand, while continuing to selectively pursue growth opportunities primarily in Asia," Wilkins said.
The cost of the changes, about A$60 million pre-tax, would be booked as a restructuring provision in fiscal 2008.
- AAP
