Canadian insurer Intact Monetary and its subsidiary RSA Insurance coverage have agreed to accumulate the brokered business traces enterprise of UK-based Direct Line Insurance coverage for £550m ($689.47m).
Based on the deal, Intact will make an preliminary money cost of £520m.
Direct Line can be eligible to obtain an extra cost of as much as £30m beneath earnout provisions topic to the acquired enterprise’ monetary efficiency.
The acquisition is a part of Intact’s technique to bolster the presence of its UK unit, RSA Insurance coverage, within the business traces market.
Following the deal closing, the renewal rights, manufacturers, staff and techniques of Direct Line’s brokered business traces unit will likely be transferred to RSA.
In 2022, the brokered business traces unit of Direct Line generated £530m in written premiums, with almost 96% in common mixed ratio for 2021 and 2022.
Intact Monetary CEO Charles Brindamour stated: “This acquisition considerably strengthens our UK&I enterprise, and is strongly aligned with our strategic and monetary targets.
“The transaction enhances our place within the UK by doubling down on traces of enterprise the place we already outperform.”
The acquisition may even widen the dealer distribution community and current business traces merchandise of RSA.
With the takeover, almost 800 employees of Direct Line will be a part of RSA to offer continued help and repair supply.
RSA CEO Ken Norgrove stated: “We stay up for welcoming a group of skilled, extremely proficient and expert colleagues from robust manufacturers, together with NIG and FarmWeb, to additional improve RSA’s robust business traces enterprise.”
The boards of administrators of each firms have permitted the acquisition whereas shareholders of Direct Line are but to offer their nod.
Topic to mandatory approvals and shutting circumstances, the acquisition is anticipated to conclude within the second quarter of 2024.
Intact additionally revealed that it’s exploring choices for the UK Private traces enterprise of RSA, together with a possible divesture.
Direct Line just lately agreed to make a cost of £30m as compensation for allegedly overcharging its present prospects.
