FRANKFURT (Bloomberg) - Allianz SE's industrial insurance unit will no longer provide so-called "fronting" for competitors XL Capital Ltd. and American International Group Inc., Financial Times Deutschland (FTCD) aid, citing an interview with division head Axel Theis.

Industry insurers usually work in groups on large transactions and the leading insurer often provides an advance payment, known as fronting, before getting money back from the other partners, FTD said. If one of the partners defaults, the consortium leader is stuck with the bulk payment, the newspaper reported. The Allianz Global Corporate & Specialty unit will not front Bermuda-based XL anymore when deals involve long-term risks, Mr. Theis told the newspaper. The unit also plans to change its legal structure to a pan-European company, or Societas Europaea, Mr. Theis said in the interview.

XL shares climbed six cents (1.8 percent) to $3.39 in New York Stock Exchange trading yesterday. AIG fell two cents (1.3 percent) to $1.55.