Canada's Intact to buy UK-based Direct Line's brokered commercial lines unit
Canadian insurer Intact Financial announced on Wednesday its intention to acquire the brokered commercial lines operations of British insurer Direct Line, in a move to bolster its UK unit RSA. The deal will see Intact pay an initial amount of 520 million pounds ($650 million) to complete the transaction.
The agreement will lead to RSA acquiring the rights to renewals, brands, staff, and systems.
In a statement, Charles Brindamour, CEO of Intact, commented that the deal strengthens our presence in the UK by focusing more on areas where we are already excelling.
The agreement conditions involve the possibility of an additional 30 million pounds payment that will depend on how well the purchased business lines perform financially.
In 2022, the Direct Line division produced revenues worth 530 million pounds by providing insurance options to various sectors. This included coverage for small business proprietors, building owners, and automobile fleets. Additionally, the unit achieved an impressive average combined ratio of roughly 96% between the years 2021 and 2022.
Intact is currently investigating strategic choices for RSA's UK Personal lines business, which might potentially entail a sale, as confirmed by the company.
Accounts from the United Kingdom and other countries contribute roughly 20% of Intact's revenue from underwriting.
(1 dollar equals 0.7997 pounds)
Written by Jaiveer Singh Shekhawat in Bengaluru and Nivedita Balu in Toronto; Edited by Sriraj Kalluvila