Insurer Aviva has finalised a transaction to acquire Probitas, a Bermuda-based holding company, which includes a syndicate and other insurance subsidiaries.
Under the agreement, Aviva will purchase Probitas Holdings (Bermuda) Limited, the parent company of the Probitas Group, for a guaranteed sum of £242 million (around CA$415.9 million).
Included in this acquisition are the Probitas Managing Agency, responsible for managing Lloyd’s Syndicate 1492, Probitas Corporate Capital Limited, and other subsidiary entities.
Since its inception in October 2015, Probitas has reported GAAP NCOR figures of 78.7%, 78.6%, and 79.8% for the years 2021, 2022, and 2023 respectively. The 2024 forecast for Syndicate 1492 anticipates gross written premiums of approximately £400 million, with operations spanning London, Manchester, Australia, Europe, Mexico, and Canada.
The completion of the deal hinges on fulfilling standard closing conditions, including obtaining the necessary regulatory approvals, with an anticipated finalisation in mid-2024.
The Probitas acquisition is expected to bolster Aviva’s Global Corporate & Specialty (GCS), with the division named as a central component of Aviva’s UK General Insurance (GI) operations. It is also expected to strengthen the group’s objectives in hastening the development of capital-efficient divisions.
Syndicate 1492 disclosed a gross written premium (GWP) of £288 million in 2023 and has seen a 21% compound annual growth rate (CAGR) since 2019. Throughout this timeframe, the enterprise has recorded an average combined ratio of 82%.
Ash Bathia, Probitas’ chief executive, expressed enthusiasm about the acquisition, saying that Aviva is the ideal partner, and the transaction will result in combined opportunities across the board.
“The success of Probitas is built on solid foundations; a fantastic team of people, rigorous underwriting discipline, market leading actuarial and analytics capability and a broad distribution network, all underpinned by a strong set of values and corporate culture,” Bathia said. “As Probitas embarks on the next stage of its evolution it was important to find a partner with the financial strength and ambition to allow us to increase our share of the vast global specialty business by using our extensive Lloyd’s licences combined with Aviva’s brand strength, scale and distribution reach.”
Echoing Bathia’s sentiments, Jason Storah, CEO of Aviva UK & Ireland General Insurance, highlighted the mutual benefits of the merger.
“This is a fantastic opportunity for both Aviva and Probitas,” Storah said. “The Probitas track record, technical expertise and high-quality team will be an excellent addition to Aviva. They will continue to run the business post-acquisition and the Probitas brand will remain. We want to preserve their unique, agile culture and support the team to focus on delivering profitable growth that will benefit from leveraging Aviva’s own scale and capabilities.”
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