This will make IAG the largest general insurer in Australia and will add the Wesfarmers Insurance (WFI) and Lumley Insurance brands to its existing stable including CGU, NRMA, RACV SGIO and SGIC.

“The real interest for the rural sector will be the impact of the acquisition on both CGU and WFI who already have a significant market share in both Farmpack and cereal crop insurance,” according to AgriRisk Managing Director, John van der Vegt.

“CGU have focused on delivering technically rated, quality products primarily through insurance brokers whereas WFI have focused on price competitive products distributed mainly via insurance agents.

“It will be interesting to see how the two companies operate in the future and in particular whether they are merged or continue to operate independently,” Mr van der Vegt said.