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

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

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

The FTSE 100 firm also said Lloyd’s represented a “significant untapped source of growth” due to its strong distribution networks, premium volumes and international licenses.

Under the terms of the transaction, Aviva will gain leasing rights to Syndicate 1492, whose gross written premiums amounted to £288 million last year and have achieved a compound annual growth rate of 21 per cent since 2019.

Aviva left Lloyd’s in 2000 following the merger of Norwich Union with CGU and the sale of its management 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.

Headquartered in London, Probitas is a specialist underwriting syndicate 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 optimize its potential and ambition.”

He added: “I am convinced that Aviva is an ideal partner and I am really excited to be part of the Aviva Group and the opportunities that lie ahead for our business and our people.”

Aviva expects to receive healthy financial returns from the acquisition, which aims to complete by the middle of this year, pending regulatory approval.

Jason Storah, director of Aviva’s general insurance business in the UK and Ireland, said: “Probitas’ track record, technical expertise and high-quality team will be an excellent addition to Aviva.”

‘They will continue to run the business after the acquisition and the Probitas brand will remain. “We want to preserve its 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 expects to report a 5 to 7 per cent increase in operating profit, dividend payments of around £915 million and a £750 million reduction in gross costs a year earlier.

aviva shares They were down 0.2 per cent at 446.9p on Monday morning, although they are still up about a fifth in the last six months.