CGU plc's Evolution Through Mergers and Acquisitions

CGU plc's history is a story of growth and transformation through strategic mergers and acquisitions. The company's evolution began in 1986 with the merger between Commercial Union and General Accident.

This merger created a new entity, Commercial General Investments, which later changed its name to CGU plc. In 1998, CGU plc acquired Norwich Union, a leading UK life and pensions insurer.

This acquisition marked a significant milestone in CGU plc's expansion into the life insurance market.

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CGU's history is marked by strategic takeovers and mergers that have shaped the company into what it is today.

The first takeover came in 1900 when CU bought Britain's Palatine Insurance Company of Manchester, making CU the first British company to handle all four classes of insurance.

CU continued to grow through acquisitions, purchasing several other companies, including Union Assurance and American, which were rescued buyouts after suffering losses from the 1906 San Francisco fire.

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CU's business continued to grow, but the company faced setbacks during the Great Depression and World War I. In the 1980s, CU reduced its US business after bad losses, but made more acquisitions in Continental Europe, where it now accounted for 30 percent of the company's worldwide premium income.

By 1988, CU's profits reached a new peak of £202 million, but fell back to £150 million in 1989.

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Szabo v. CGU International Ins was a significant case that tested the validity of CGU's policy exclusions.

CGU had been acquired by the Insurance Australia Group (IAG) in 2007, marking a major milestone in the company's history.

The case centered around a policy exclusion clause that CGU had inserted into its policies, which was later deemed unfair by the courts.

CGU had been in the process of expanding its operations globally through strategic mergers and acquisitions.

The court ruling in Szabo v. CGU International Ins had a lasting impact on CGU's approach to policy drafting and customer communication.

CGU continued to grow and evolve through further mergers and acquisitions, including the acquisition of the Wesfarmers Insurance business in 2015.

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In 1998, Commercial Union and General Accident merged to form a new company, CGU PLC. This move was a response to intense competition and falling premium rates in Europe.

The merger was completed in June 1998, leaving CGU with £100 billion in assets under management and a stock market value of £14.8 billion. This made CGU the second largest British insurer behind Prudential.

The combined company aimed to capture greater market share and cut operating costs by 10 percent through job losses and integrating information technology systems. Analysts believed the merger would bolster the life insurance business potential of the new company.

By 1999, the life and savings business had grown to over 50 percent of CGU's total business. This shift marked a significant change in the company's focus towards building a stronger life and savings business.

CGU's management had witnessed the rise of bancassurance, a service model that fulfilled both banking and insurance needs. The company saw opportunity in this area, especially with the competition and difficulty in profitable growth from general insurance.

CGU's business was initially 60 percent general insurance and 40 percent life and savings products. However, the company's focus on life and savings business continued to grow in the following years.

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CU started expanding by buying existing insurance operations in the early 20th century, with its first strategic takeover being the Palatine Insurance Company of Manchester in 1900.

This acquisition made CU the first British company to handle all four classes of insurance: fire, life, marine, and accident. The purchase was a strategic move to expand CU's business and increase its market share.

CU continued to grow through acquisitions, buying six other companies in the UK and two in the US, including the Philadelphia-based American and the California Insurance Company. The company's premium income grew significantly, reaching £7.5 million by 1914.

The 1921 depression caused a drop in CU's income, but the company continued to grow, aided by the growth of automobile ownership and a huge new market for accident insurers. CU made further acquisitions, including the takeover of British General in 1926.

In the 1980s, CU reduced its US business after suffering bad losses, but made more acquisitions in Continental Europe, where it now accounted for 30% of CU's worldwide premium income. The company's profits peaked at £202 million in 1988.

CU's expansion continued through the formation of a new holding company, Commercial Union PLC, in 1990, which facilitated the company's entry into financial services activities. The company began operations in Poland in 1992 and opened offices in South Africa and Vietnam in 1996.

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CGU's organization is structured around its core business units, which include General Insurance and Life Insurance.

The General Insurance business unit offers a range of insurance products to individuals and businesses, including home and contents insurance, motor insurance, and commercial insurance.

CGU's Life Insurance business unit provides life insurance, superannuation, and financial planning services to individuals and businesses.

The company's operations are supported by a network of offices and agencies across Australia and New Zealand.

CGU has a significant presence in the Australian insurance market, with a strong brand and a long history of providing insurance services to individuals and businesses.

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