Groupama is to sell its UK operation as the French insurer scrabbles to raise funds to shore up its EU debt position.
It is understood that in relation to its exposures to the EU debt crisis, Groupama is looking to raise upwards of £300m with the sale of its UK arm which includes brokers Bollington, Carole Nash and Lark.
The insurer hopes that if it can raise enough capital, it will be able to avoid the dreaded junk bond status that has stalked it since late last year.
Eric Galbraith, chief executive of the British Insurance Brokers' Association, said he was sad to see Groupama go but hoped that it would be business as usual for brokers.
"Brokers just have to watch what's going on - I hope the service and business' position will carry on as usual and hopefully there won't be too much uncertainty," he said.
"My concern would be that this is perhaps a further reduction of the market which reduces competition and from a broking point of view, a reduction in competition is a concern.
"Groupama has always been a player in the market and a supporter of brokers so I am sorry to see them go" he added.
This story orginally appeared on COVER's sister site, Insurance Age.
