Aviva has officially announced its acquisition of Optiom O2 Holdings Inc (Optiom) from Novacap and other minority shareholders.
The deal, valued at approximately £100 million (around CA$170 million), sees Aviva taking over a prominent managing general agent (MGA) in Canada, known for its vehicle replacement insurance offerings and flexible payment options for customers.
According to a news release, the deal marks a significant expansion of Aviva’s capital-light business ventures, which already constitute over half of the company’s portfolio. Specifically, the deal enhances Aviva Canada’s presence in a profitable niche of the Canadian insurance market.
Aviva, having previously been an underwriting capacity provider for Optiom, views the deal as an opportunity to deepen its involvement in a lucrative line of business and to secure a stable and growing source of distribution income. The acquisition also aligns with Aviva’s capital management framework, which remains consistent with the company’s strategy, the firm stated. Aviva continues to focus on delivering regular and sustainable returns of surplus capital.
“The acquisition strengthens our offering and distribution capabilities in a highly attractive segment of the Canadian insurance market. We know Optiom well through our existing relationship and are excited about what we can do together to better serve our brokers and customers,” Aviva Canada CEO Tracy Garrad said.
Subject to standard closing conditions, including regulatory approvals, the transaction is expected to be completed in the first quarter of 2024.
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