Aviva acquires an MGA for £100m to expand in ‘attractive’ business line
UK insurer Aviva has struck a £100 million MGA acquisition deal as part of its capital-light growth strategy in the Canadian market. The deal will strengthen Aviva Canada's specialty lines business and distribution capabilities.
Aviva has acquired Optiom O2 Holdings from Novacap and other minority shareholders for consideration of £100 million (C$170 million). The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close in Q1 2024.
Optiom operates as a managing general agent (MGA) and provides vehicle replacement insurance in Canada and offers flexible payment options to customers.
Aviva said the acquisition expands its capital-light businesses, which make up over half of Aviva's portfolio, and grows Aviva Canada's presence in a profitable segment of the Canadian insurance market.
As an existing underwriting capacity provider for Optiom, the transaction provides an opportunity for Aviva Canada to increase its access to an “attractive line of business”, while securing a stable, growing stream of distribution income. Optiom's distribution relationships will allow Aviva Canada to reach additional customers.
The acquisition is in line with the company’s capital management framework, which remains unchanged, Aviva noted. “We continue to anticipate further regular and sustainable returns of surplus capital,” it said.
Tracy Garrad, chief executive officer of Aviva Canada, said: “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.”
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
