Aviva Canada To Acquire RBC General Insurance For £281 Mln

(RTTNews) - Aviva plc (AV, AV.L) said that its Canadian business, Aviva Canada, will acquire RBC General Insurance Company, the existing home and motor insurance business of RBC Insurance.

Aviva Canada will also enter into an exclusive 15 year strategic agreement with RBC Insurance to provide a full range of general insurance products to existing and future RBC Insurance customers. RBC Insurance customers will also benefit from Aviva Canada's expertise in claims, underwriting and new product development.

Under the agreement, Aviva will pay RBC Insurance £281 million, on completion, subject to customary completion adjustments. The transaction will be accretive to Aviva's operating earnings and increase Aviva Canada's annual gross written premiums (GWP) by approximately 20%. In 2014, Aviva Canada's GWP was £2.2 billion.

The transaction is subject to customary closing conditions, including receipt of required regulatory approvals and is expected to close in the third quarter of 2016.

Separately, RBC Insurance confirmed that it has signed a 15-year strategic agreement with Aviva Canada Inc., which will allow it to market and sell a full suite of property and casualty (P&C) insurance products to Canadians. In addition, Aviva Canada will purchase RBC General Insurance Company, which includes certain home and auto insurance manufacturing capabilities including claims, underwriting and product development for C$582 million.

The transaction is expected to close in the third calendar quarter of 2016 subject to customary closing conditions, including receipt of required regulatory approvals. A net after-tax gain on the transaction is currently estimated at C$200 million. The net gain is based on current estimates and subject to change.

As part of the agreement, approximately 575 employees will become part of Aviva, through the acquisition of RBC General Insurance Company. There is no change for policyholders at this time. RBC Insurance will continue to be the insurer and provide assistance and claims settlement services for existing policyholders until the transaction closes.