10th September 2023
Intact Financial Corporation and its subsidiary RSA today announced that they have reached an agreement with Direct Line Insurance Group to acquire Direct Line’s brokered Commercial Lines operations. The purchase price includes an initial cash consideration of £520m(C$884m), with potential for up to a further £30m(C$51m) contingent payment under earnout provisions relating to the financial performance of the acquired business lines. The transaction will result in the transfer of renewal rights, brands, employees, and systems to RSA.
Direct Line’s brokered Commercial Lines generated written premiums of £530m in 2022, and delivered an average combined ratio of approximately 96 across 2021 and 2022.
The transaction has been unanimously approved by the Boards of Directors of both Intact and Direct Line, and is subject to approval by Direct Line’s shareholders.
“This acquisition significantly strengthens our UK&I business, and is strongly aligned with our strategic and financial objectives,” said Charles Brindamour, ceo, Intact Financial Corporation. “The transaction enhances our position in the UK by doubling down on lines of business where we already outperform.”
Ken Norgrove, ceo, RSA, added: “We look forward to welcoming a team of experienced, highly talented and skilled colleagues from strong brands, including NIG and FarmWeb, to further enhance RSA’s strong Commercial Lines business.”
To accelerate its outperformance ambition, Intact is also exploring strategic options in respect of RSA’s UK Personal lines business, including a possible sale. RSA had previously announced its exit from the UK Personal Lines motor market in March 2023, as well as outlined plans to optimise its leading Home and Pet platforms.
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