Aviva to re-enter Lloyd’s market with £242m takeover deal

  • Aviva left Lloyd’s in 2000 following the merger of Norwich Union with CGU
  • The firm said the takeover would bolster growth in its general insurance arm

Aviva is set to rejoin the Lloyd’s of London marketplace after agreeing to acquire the underwriting syndicate Probitas for £242million.

Britain’s largest life insurer said the takeover would help bolster growth in its capital-light general insurance business, particularly its global corporate and specialty arm.

The FTSE 100 firm also said Lloyd’s represented a ‘major source of untapped growth’ due to its strong distribution networks, premium volumes and international licences.

The group said that the deal will help grow Aviva Canada’s presence in a ‘profitable segment of the Canadian insurance market’

Under the transaction’s terms, Aviva will gain tenancy rights to Syndicate 1492, whose gross written premiums totalled £288million last year and has achieved a 21 per cent compound annual growth rate since 2019.

Aviva left Lloyd’s in 2000 following the merger of Norwich Union with CGU and the sale of its managing agency, Marlborough, to the Berkshire Hathaway Group.

But last summer, its chief executive, Amanda Blanc, said the company was interested in re-entering the historic commercial market.

Based in London, Probitas is an underwriting syndicate specialising in construction, property, cyber and casualty insurance.

Ash Bathia, its chief executive, said: ‘As Probitas embarks on the next stage of its evolution, it was important to find a partner with the financial strength and commitment to enable Probitas to optimise its potential and ambition.’

He added: ‘I am convinced that Aviva is an ideal partner and I am truly excited about being part of the Aviva Group and the opportunities ahead for our business and staff.’ 

Aviva expects to receive healthy financial returns from the acquisition, which it intends to finalise during the middle of this year, dependent on regulatory approval.

Jason Storah, head of Aviva’s UK & Ireland General Insurance arm, said: ‘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.’

Aviva’s announcement comes three days before the planned publication of its annual results.

The group anticipates reporting a 5 to 7 per cent rise in operating profit, dividend payments of around £915million and scoring £750million in gross cost reductions a year early.

Aviva shares were 0.2 per cent lower at 446.9p on Monday morning, although they have still increased by approximately a fifth over the past six months.

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