Aviva’s Canadian business said Thursday it will acquire RBC General Insurance Company, the home and motor insurance business of RBC Insurance, for £281m.
The deal provides
Aviva Canada with an additional distribution channel to complement its 1500 independent broker partners.
Mark Wilson, Aviva group CEO, said the partnership extends Aviva’s presence in general insurance and presents excellent opportunities for revenue and earnings growth in the Canadian market. “RBC has a formidable brand and loyal customer following whilst Aviva brings deep insurance expertise," he said.
Under the deal Aviva Canada will also enter into an exclusive 15-year strategic agreement with RBC Insurance to provide a full range of general insurance products to existing and future RBC customers. Around 575 employees from RBC Insurance that handle underwriting, claims and other activities will become part of Aviva.
Canada is a significant market for Aviva, the second largest general insurance business in the group, and continues to perform strongly. At HY15 Aviva Canada increased operating profit 59% to £132m; more than doubled underwriting profit to £82m and the Combined Operating Ratio improved to 91.9%.
The transaction will be accretive to Aviva’s operating earnings and increase Aviva Canada’s annual gross written premiums (GWP) by approximately 20%. In 2014, Aviva Canada’s GWP was £2.2bn.
