Aviva to acquire Canadian vehicle replacement insurance provider Optiom

Aviva plc has announced its acquisition of Optiom O2 Holdings Inc, commonly known as Optiom, for a consideration of approximately £100 million (about CAD$170 million). Optiom, a leading provider of vehicle replacement insurance in Canada, was previously owned by Novacap and other minority shareholders. This acquisition represents a significant expansion of Aviva’s capital-light businesses, which already constitute over half of the company’s portfolio.

Strategic Expansion in Canadian Insurance Market by Aviva

The purchase of Optiom marks a strategic move by Aviva to enhance its presence in a profitable segment of the Canadian insurance market. Given that Aviva Canada has been an underwriting capacity provider for Optiom, this acquisition offers a unique opportunity to access an attractive line of business. It also ensures a stable and growing stream of distribution income. Optiom’s established distribution relationships are set to broaden Aviva Canada’s customer reach, promising top-tier service to both new and existing clients.

Comments from Aviva Canada’s CEO, Tracy Garrad

Tracy Garrad, the Chief Executive Officer of Aviva Canada, commented on the acquisition, stating, “The acquisition strengthens our offering and distribution capabilities in a highly attractive segment of the Canadian insurance market. We know Optiom well through our existing relationship and are excited about what we can do together to better serve our brokers and customers.”

Future Outlook and Closing Conditions

The acquisition aligns with Aviva’s capital management framework, which remains steadfast. The company expects to continue its trend of regular and sustainable returns of surplus capital. Subject to customary closing conditions, including regulatory approvals, the transaction is anticipated to conclude in Q1 of 2024.