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Aviva could see its credit rating cut if its £3.7bn takeover of rival home and car insurer Direct Line goes through.
Specialist ratings agency AM Best said it had put Aviva’s long-term financial strength and credit ratings under review due to uncertainty over how the deal will affect its finances.
Aviva has a financial strength score of A+ and a credit rating of AA-, the second highest available from AM Best.
Direct Line shareholders are expected to approve the acquisition in the first quarter of 2025 and the deal is expected to be completed by mid-year.
Aviva closed the deal with Direct Line just before the Christmas Day deadline
AM Best said: “The ratings will remain under review until the group’s post-acquisition credit fundamentals become clearer.”
The acquisition of Direct Line is expected to add more than £3bn to Aviva’s annual insurance revenue, which reached £18bn last year.
Aviva is the UK’s largest general insurer and the addition of Direct Line, which holds the top three positions in the home and motor insurance markets, will cement its place.
Aviva closed the deal just before the Christmas Day deadline.
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