Argus Insurance yesterday announced that it had reached an agreement with the UK's largest insurer to buy the company's in-force book of Bermuda business ? a move that will reportedly double the size of Argus' local property book.

President and CEO Gerald Simons said Argus expected to close its acquisition of the Bermuda portfolio of CGU International Insurance plc (CGUII) from Aviva plc at the end of the month but declined to give any financial details of the transaction.

The development marks the second time in days that Argus has acquired business from Aviva ? which is ranked as the top UK insurer and as the world's fifth largest insurer based on world-wide premiums written topping ?30 billion ? after announcing earlier in the month that it was buying up Aviva's property and casualty operation in Gibraltar.

That move could pave the way for Argus to write business in EU countries although the company said initial plans were to focus on the Gibraltar market alone.

Both the Bermuda and Gibraltar purchases come after about 20 years of Argus following an organic growth strategy but Mr. Simons said the local market was a competitive one and the company had decided it would be easier to grow market share by acquisition than growth.

"We recognise that the market in Bermuda is very limited: 60,000 people or so and 21 square miles. So, the Gibraltar opportunity in particular allowed us to expand beyond our shores and to diversify the risks that we cover. Gibraltar, for example, is not prone to hurricanes. And to increase our share of the market here, it is easier to acquire a portfolio than to actually try to grow it because it is a very competitive market."

Argus is also no stranger to the book of business it is buying with its subsidiary company Centurion Insurance Services Limited having managed the CGUII business in Bermuda for the last decade. The portfolio is comprised of property and casualty risks in Bermuda, and will continue to be handled by Centurion.

"I should say the acquisition of this portfolio is a natural step for Argus. We currently manage the business and by purchasing the business from CGUII, we will further strengthen our position as Bermuda's largest provider of insurance and pension administration services," Mr. Simons said.

He added that some people would be very familiar with the old Commercial Union portfolio ? which first wrote business in Bermuda on July 31, 1883 when a policy was taken out to cover five hundred barrels of rum in a bonded warehouse ? which is part of the book of business being acquired.

The change should result in no noticeable changes for customers, the parties said.

Centurion currently employs five staff and Mr. Simons said no new hires or redundancies were likely to follow the purchase.

Director of Merger & Acquisition activity for Aviva Plc. Ian Nelson, who was on the Island yesterday, said Aviva was quitting the Bermuda market because its business here was no longer in line with the company's business plan, with a focus on large markets and a greater focus on life insurance.

"When Aviva sells a business, as we have done around the world, one of the main characteristics we look for in a buyer is strong calibre of people and financial strength. Consequently we are delighted to have found an ideal buyer in the form of Argus.

"I would like to just add that the exit by CGUII from underwriting in Bermuda should not be seen as a negative either for Centurion or the Argus Group, or indeed, Bermuda itself.

"The Aviva Group, over the last few years, has increasingly been focusing its energies on a smaller number of larger markets in the world and Bermuda just happens to be one of those markets where it is no longer economically sensible for a large group like Aviva to continue to write business.

"We are focusing on some bigger parts of the world; primarily Europe and Asia.

"Please don't take this as a negative. We have had a fantastic experience doing business in Bermuda."

"Over the last four or five years, the group has been shifting its focus from writing mainly general property and casualty insurance and increasing its life insurance and savings so that now as a group, the proportion of our premium income is about 65 percent life and 35 percent general insurance while it used to be the other way around. Our group has said it intends to keep this proportion; this 65/35 ratio."

Mr. Nelson said that the group was not only quitting small markets but had also pulled out of writing property-casualty business in some larger markets such as Australia, the US, New Zealand and in Asia.

Meanwhile, pressed for financial details of the acquisition, Mr. Simons said: "We won't be revealing any of the financial aspects of the deal," but he did allow that the acquisition of the CGUII's book of in-force business would effectively double the size of Argus' property book in Bermuda.

When asked if shareholders and potential investors ? with Argus trading on the Bermuda Stock Exchange and Aviva trading on the London Stock Exchange ? were not entitled to some information on the cost of the acquisition, he said: "We invest money and make financial decisions everyday.

"I should make the point in regards to Stock Exchange rules, only certain financial transactions are required to be reported and this does not meet those criteria.

"We operate in a very competitive environment in any case and it is not customary to reveal this kind of information and other companies have also not revealed this information when they have acquired portfolios."