Aviva plc has announced its acquisition of Optiom O2 Holdings Inc, a prominent vehicle replacement insurance business.
The deal, valued at approximately £100 million (approximately CAD$170 million), involves the purchase of Optiom from Novacap and other minority shareholders.
Optiom operates as a managing general agent (MGA) and is renowned for its leading position in the Canadian market, specializing in vehicle replacement insurance. Notably, the company distinguishes itself by offering flexible payment options to its customers.
This acquisition aligns with Aviva’s commitment to capital-light growth strategies, a key component of its diversified portfolio. With over half of Aviva’s portfolio dedicated to capital-light businesses, the move strategically reinforces the insurer’s foothold in the lucrative Canadian market.
The transaction is expected to strengthen Aviva Canada’s specialty lines business and enhance its distribution capabilities. As Aviva already serves as an underwriting capacity provider for Optiom, this acquisition presents a unique opportunity for Aviva Canada to further expand its reach in a profitable segment of the Canadian insurance landscape.
Optiom’s well-established distribution relationships will play a pivotal role in Aviva Canada’s expansion strategy, enabling the insurer to tap into new customer bases. This, in turn, is anticipated to contribute to a steady and growing stream of distribution income for Aviva Canada.
In addition to fortifying its market position, Aviva’s acquisition of Optiom underscores the company’s commitment to delivering top-notch service. Existing Aviva Canada customers, along with new clients gained through Optiom’s distribution channels, can expect to receive best-in-class service as Aviva continues to diversify and strengthen its presence in the Canadian insurance sector
The acquisition aligns with Aviva’s established capital management framework, a strategy that remains steadfast and unaltered.
The completion of the transaction is contingent upon meeting standard closing conditions, including obtaining necessary regulatory approvals. Anticipated to conclude in the first quarter of 2024, the acquisition is poised to move forward pending the fulfillment of these customary requirements.
Tracy Garrad, Chief Executive Officer of Aviva Canada, said: “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.”
The acquisition aligns with Aviva’s established capital management framework, a strategy that remains steadfast and unaltered.
The completion of the transaction is contingent upon meeting standard closing conditions, including obtaining necessary regulatory approvals. Anticipated to conclude in the first quarter of 2024, the acquisition is poised to move forward pending the fulfillment of these customary requirements.
