2nd Jan 2020 11:22
(Alliance News) - German insurer Allianz SE said Thursday it has completed the acquisition of the remaining stake in Liverpool Victoria's General Insurance group it did not already own and completed the acquisition of the General Insurance unit of FTSE 100-listed Legal & General Group PLC.
Allianz plans to merge the two businesses, with the German firm saying the combined unit will place it as the number two general insurer in the UK. Based on 2018 figures, the combined business would've had a gross written premium income over GBP4 billion and a UK market share of 9%.
In December 2017, Allianz acquired an initial 49% stake in LV= General Insurance for GBP500 million, with a second stage transaction taking place at the end of 2018 in which Allianz acquired a further 20.9% stake, for GBP213 million, through an agreed, forward purchase.
Then, last April, Allianz and LV= announced that Allianz would acquire the remaining 30% of the LV= General Insurance unit it did not already own for GBP365 million. The total consideration for LV GIG topped GBP1.08 billion.
Separately, Allianz agreed to buy L&G's General Insurance unit for GBP242 million at the end of May 2019. This deal also completed Thursday.
Allianz noted the L&G brand will still be used in the UK for up to three years.
The L&G General Insurance business mainly sold household insurance to retail customers. In 2018, the unit saw GBP410 million in gross written premiums with a zero operating profit. Previously, L&G said the sale is expected to increase its own solvency II ratio by about 2%.
L&G's General Insurance sale is the latest of a succession of disposals by the company in recent years, which includes its historic savings businesses - Mature Savings, Cofunds, Suffolk Life - and its international savings businesses in Ireland, Egypt and Germany. L&G recently offloaded its international insurance businesses in the Netherlands, France and India. Combined, these disposals have raised "in excess" of GBP1.5 billion.
Allianz UK Chief Executive Jon Dye said: "This is a pivotal moment in the history of Allianz in the UK. These two deals create a formidable layer in the UK general insurance market with a balanced business across personal and commercial lines, tremendously strong brands and a great team of people, focused on delivering for our customers.
"We will be looking to build upon the great success of our joint venture with LV GIG in home and motor insurance, strengthened further by the acquisition of L&G GI."
Shares in Allianz were 1.1% higher in Frankfurt on Thursday at EUR220.90 each. L&G was trading 2.6% higher in London at 310.90 pence.
By Paul McGowan; [email protected]
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