LONDON, UNITED KINGDOM--(Marketwired - Jan 21, 2016) - Aviva PLC (
NYSE: AV; LSE: AV.
21 January 2016
AVIVA ACQUIRES RBC GENERAL INSURANCE COMPANY AND SIGNS EXCLUSIVE LONG TERM STRATEGIC AGREEMENT
Aviva plc ("Aviva") today announces that its Canadian business, Aviva Canada, will acquire RBC General Insurance Company, the existing home and motor insurance business of RBC Insurance. 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 Insurance customers. RBC Insurance customers will also benefit from Aviva Canada's expertise in claims, underwriting and new product development.
The acquisition of RBC Insurance's home and motor insurance business consolidates Aviva's position as a leading general insurer in Canada. This deal provides Aviva Canada with an additional distribution channel to complement its long standing commitment to the independent broker channel, where it serves 1500 independent broker partners.
Under the agreement, Aviva will pay RBC Insurance £281 million1, on completion, subject to customary completion adjustments. The transaction will be accretive to Aviva's operating earnings and increase Aviva Canada's annual gross written premiums (GWP) by approximately 20%2. In 2014, Aviva Canada's GWP was £2.2 billion.
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 £132 million (HY14: £83m); more than doubled underwriting profit to £82 million (HY14: £30m) and the Combined Operating Ratio improved to 91.9% (HY14: 96.8%).
The transaction is subject to customary closing conditions, including receipt of required regulatory approvals and is expected to close in the third quarter of 2016.
Mark Wilson, Group Chief Executive Officer, said:
"This new partnership extends Aviva's presence in general insurance, brings additional diversification benefits to the group and presents excellent opportunities for revenue and earnings growth in the attractive Canadian market. RBC has a formidable brand and loyal customer following whilst Aviva brings deep insurance expertise - all the makings of an excellent partnership."
|Andrew Reid||+44 (0)20 7662 3131|
|Yasmin Saleh||+44 (0)20 7662 8710|
|David Elliot||+44 (0)20 7662 8048|
Notes to editors:
* Before the deduction of Aviva and Friends Life overlapping customers.
1 CAD$ 582 million, converted at an exchange rate of CAD$ 2.07/GBP 1
2 Based on RBC General Insurance 31 October 2015 and Aviva Canada 31 December 2014 Annual Financial Statements