Insurance Australia Group Limited (IAG) has acquired the UK-based broker Hastings Insurance Services Limited, the UK's fifth largest motor insurance broker trading under the names of Hastings Direct and Peoples Choice.

The insurer has also acquired Advantage Insurance Company Limited, a direct personal lines insurer, specialising in motor insurance in the UK market. IAG's CEO, Michael Hawker, characterised the acquisition of the business as a perfect entry point to the UK market and said it would continue to build the group's portfolio of businesses in mature and emerging markets.

"Our strategy in mature markets like the UK is to target successful general insurance businesses, primarily in motor, where we can access new customers and local market expertise, while leveraging our product, underwriting and claims expertise to enhance their growth profile," Hawker explained. "In addition, IAG will benefit from further diversification by geography and revenue stream."

Hawker also indicated that IAG plans no immediate changes in either company's management. He also indicate that in line with IAG's strict investment criteria the acquisition was expected to be earnings per share positive within 18 months.