Aviva expands global footprint with £249m Probitas acquisition

In a significant expansion move, Aviva plc has finalized the acquisition of Probitas Holdings (Bermuda) Limited for a total consideration of £249 million. This strategic purchase, first announced on March 4, 2024, not only enhances Aviva’s capabilities but also marks its entry into the prestigious Lloyd’s market.

The acquisition encompasses Probitas’s fully-integrated Lloyd’s platform, including its Corporate Member, Managing Agent, and international distribution networks, along with tenancy rights to Syndicate 1492. This move is poised to significantly diversify and expand Aviva’s footprint in the global insurance market.

Amanda Blanc, Group CEO of Aviva, emphasized the acquisition’s alignment with the company’s growth strategy. “This acquisition is another step in our strategy to invest in Aviva’s future profitable growth. Aviva’s presence in the Lloyd’s market opens up new opportunities to accelerate growth in our capital-light General Insurance business,” she stated.

The Lloyd’s market represents a substantial growth avenue for Aviva, promising access to extensive premium volumes, international licenses, and expanded distribution networks. The integration into Lloyd’s allows Aviva to leverage its existing underwriting expertise and broker relationships effectively.

Syndicate 1492, a part of the acquisition, has shown impressive performance with a gross written premium of £288 million in 2023 and a compound annual growth rate of 21% since 2019. It has consistently outperformed within its Lloyd’s peer group, maintaining an average combined ratio of 82%. The ongoing growth trajectory is supported by favorable pricing trends and the expansion of product lines and distribution networks.

Probitas’s management team will continue to lead the operations post-acquisition, maintaining the Probitas brand and its unique, agile corporate culture. Aviva plans to provide additional capital to the Corporate Member to support Syndicate 1492’s growth and increase its share of underwriting profits.

The acquisition is priced at approximately 7 times the estimated 2026 post-tax IFRS operating profit and is expected to deliver a high-teens internal rate of return. The transaction aligns with Aviva’s capital management framework, which remains consistent with the company’s strategy of executing high-quality, bolt-on acquisitions to accelerate growth in its capital-light businesses.

As Aviva continues to anticipate further regular and sustainable capital returns, this acquisition underlines its commitment to expanding its global corporate and specialty business and enhancing shareholder value through disciplined underwriting and profitable growth.