Aviva completes £249mn deal for Probitas

Aviva has completed its acquisition of Probitas for a total consideration of £249mn ($318.8mn) after receiving all necessary regulatory approvals.

The deal, first announced on 4 March, sees Aviva re-enter the Lloyd’s market after more than two decades away.

The carrier – then known as Norwich Union – closed its CGNU Global Risks unit and sold its Lloyd’s managing agency Marlborough to Warren Buffett’s Berkshire Hathaway following the merger with CGU in November 2000.

The deal for Probitas – launched in 2015 by former QBE executive Ash Bathia – includes Probitas Managing Agency, which is the managing agent of Lloyd’s Syndicate 1492, the corporate member Probitas Corporate Capital Limited and all other subsidiaries.

Probitas Syndicate 1492 reported gross written premiums of £288mn in 2023 and has delivered a 21 percent compound annual growth rate since 2019. The syndicate has consistently been a top performer at Lloyd’s, achieving an average combined ratio of 82 percent.

Aviva has previously stated its intention to provide additional capital to the corporate member in order to sustain Syndicate 1492’s growth trajectory and increase the share of underwriting profits that are retained within the Probitas group.

Speaking at the Financial Times Global Insurance Summit in London last month, Aviva CEO Amanda Blanc said the deal was born out of a desire to grow the carrier’s existing Global Corporate and Specialty unit.

“Our GI business was growing double-digit every year, but we could see that there was a distribution opportunity that we just weren't able to access in Lloyd’s,” Blanc said.

“We looked at the available opportunities within Lloyd’s: we could build our own… that's a pretty difficult thing to do; or we could buy a very quality business to grow from there.

“[The deal] opens up about £12bn of distribution access to us that we weren't able to access as Aviva with our existing Global Corporate and Specialty. We're excited about it. It's a high-quality business in a high-quality market.”

Jason Storah, Aviva’s UK and Ireland general insurance CEO, said: “I’m delighted to confirm that Probitas is now part of the Aviva group. Our ability to now access the Lloyd’s market, international licences and broader distribution networks, represents a significant growth opportunity for us and further enhances our customer proposition.”

Storah added: “I am also delighted to officially welcome Ash Bathia, CEO of Probitas, to my leadership team. Ash brings with him a wealth of knowledge in this space of the market which, when combined with our already strong GCS leadership team under Matt Washington, will accelerate the growth of this area of the business.”

Separately, Saudi Re confirmed that it had completed all procedures for the sale of its 49.9 percent stake in Probitas Holdings (Bermuda) to Aviva for £123mn.

Ahmad Al-Jabr, acting CEO of Saudi Re, said the transaction will enhance the company’s competitive position and financial position, as it is expected to have a positive impact on Q3 results.

“The transaction offered attractive terms, and the proceeds from the sale will strengthen the company’s capital base and increase its solvency margin. This will create significant value for shareholders, generating a return more than five times the initial investment,” Al-Jabr added.