The deal will see Aviva acquire rights to Syndicate 1492, an underwriting arm of Lloyds of London, giving the company a path back into the insurance market.
Insurance giant Aviva will return to the Lloyd’s specialist insurance market in London with the acquisition of Provitas for £242 million.
Provitas offers a wide range of insurance options, from professional liability to property casualty coverage. The acquisition of Provitas will help Aviva grow its global corporate and specialty businesses.
As part of the deal, Aviva will take over Syndicate 1492, one of Lloyd’s of London’s underwriting divisions. This allows Aviva to return to the insurance market. In 2000, Aviva (then known as Norwich Union) exited the Lloyd’s market.
This was because the company wanted to merge with CGU and focus more on personal and small business insurance. Aviva CEO Amanda Brann said re-entering the Lloyd’s market “opens up new opportunities to accelerate the growth of our light-weight general insurance business”.
The company also said: “The Lloyd’s market is a major source of untapped growth for Aviva, offering tantalizing premium volumes, international licensing and access to a broader distribution network. This transaction represents a once-in-a-lifetime opportunity for Aviva.” Aviva intends to enter the Lloyd’s market through businesses that are well aligned with Aviva’s strategy in terms of product, geography and risk profile. ”
Aviva plans to buy Lloyd’s of London’s highly profitable Syndicate Provitas, while retaining its management team and brand. The company confirmed that it looks forward to strengthening Provitas with additional capital.
Ashish Basia, CEO of Provitas, commented on the transaction: “It was important that we find a partner with the financial strength and commitment to maximize Provitas’ potential and ambitions, allowing us to significantly expand and diversify our business and take advantage of unique opportunities.” We aim to build one of the most successful and profitable franchises in the Lloyd’s market. I am confident that Aviva is the ideal partner. ”
Provitas tallied gross written premiums of £288m last year, increasing this performance metric by more than a fifth each year since 2019. The merger is expected to be completed in mid-2024. Analysts at Jefferies backed the deal, claiming they were “pleasantly surprised to find it to be a very good strategic fit for the group”.
They elaborated that “28% of premiums come from the UK and a further 19% from Canada, with almost half of the business aligning well with Aviva’s existing business areas.” The partnership could offer benefits such as providing coverage directly to customers or through Lloyd’s channels.
The move follows a series of recent moves by Aviva, including the acquisition of Canadian car insurer Optiom O2 for around £100m in November last year, and the acquisition of AIG’s UK insurance business for around £460m last year. This took place during the acquisition of Prior to this, Aviva had been winding down its business for several years under a plan led by Ms Blanc to focus on three major markets: the UK, Ireland and Canada.