Suncorp and IAG avoid truck crash

The two insurers were locked in a bitter dispute over the ownership of the National Transport Insurance venture, the nation's largest provider of truck insurance.

Since 2007, IAG has been attempting to acquire the 50 per cent stake in National Transport Insurance it does not own, but to which it had claimed it was entitled under the terms of the venture.

National Transport Insurance, which writes more than $170 million in premiums each year, was established eight years ago as a joint venture of the commercial insurance arms of IAG and Promina.

The parties had a change of control option that gave either party the right to acquire the whole business in the event that one of the shareholders was acquired.

Following Suncorp's $7.9 billion acquisition of Promina, IAG has been attempting to acquire the full business, but the two had not been able to agree on pricing or terms.

However, the two insurers yesterday said the venture would continue with no changes to National Transport Insurance's ownership structure.

The terms of the agreement will enable "the long-standing partnership . . . to continue in a manner that makes commercial sense to both parties," IAG said in a statement.

- Separately, Suncorp will test investor appetite for mortgage-backed securities, with the financial services group planning a $1.2 billion issue, marking the first time this year it has sold a package of securitised loans.

The issue, which provides a key source of finance for smaller banks such as Suncorp, will be closely watched by the industry for signs of life returning to securitisation markets.

The Australian Office of Financial Management has already committed to a cornerstone investment as part of the Rudd Government's pledge to buy $8 billion of mortgage-backed bonds to help spur the market.

The collapse of securitisation markets last year caused some lenders to slow the pace of lending substantially or even withdraw from the market entirely as funding dried up.

Credit agency Standard & Poor's has issued preliminary ratings on the issue, with nearly $1 billion rated at "AAA".