The deal will propel Ageas to fifth largest UK Non-Life insurer (with a 5.2% market share); fourth largest Private Motor insurer (with a 11.7% market share); and fourth largest Personal lines insurer (with a 7.1% market share)*.
Groupama Insurances will operate as a separate wholly owned subsidiary of Ageas UK and will work alongside Ageas Insurance Limited, both companies geared towards supporting UK brokers. A newly constituted Board will be formed with representation from Groupama Insurances and Ageas, reflecting its status as an Ageas UK company. This structure will ensure the existing plans and actions of the Groupama Insurances management team can be implemented in the most efficient way as they focus on delivering their business plan.
In addition, Groupama Insurances will continue to market their broker products through the Optima and Exclusive brands offering brokers continuity and choice. The deal gives Ageas the opportunity to expand its underwriting capabilities in complementary areas of Personal and Commercial lines business, increasing the breadth and depth of its broker product offering which will be made available to UK brokers. As part of the agreement with Groupama SA, the Groupama Insurances brand will be phased out over the next year.
The acquisition is another step in strengthening Ageas UK’s multi-channel distribution approach and its commitment to grow in the UK broker market. The acquisition also creates additional stability and certainty for brokers who have strong relationships with Groupama Insurances based on its standalone strong solvency position, now complemented by Ageas’s financial strength.
Announcing completion of the transaction, Barry Smith, CEO of Ageas UK said:
“The completion of the acquisition is great news as it offers greater certainty and comfort for brokers and their customers when dealing with Groupama in the UK which is very much open for business, now as part of Ageas. In addition and importantly, the acquisition provides a great platform to extend even further our products and underwriting capabilities to the UK broker market.
Our immediate priority is to continue to support brokers and to ensure a smooth transition. We believe the complementary strengths of Groupama Insurances alongside our existing business, will ensure brokers can continue to choose from a wide range of products that meet their customers’ needs with a guarantee that they will receive the high levels of service they have become accustomed to.”
François-Xavier Boisseau CEO of Groupama Insurances said:
“I’m delighted that the sale process is now complete and that we have become a part of Ageas UK. Not only is our business highly complementary to that of Ageas, they are also very committed to working with us to develop the full potential of our positioning as a growing specialist insurer. Importantly, the deal also allows us to benefit from their strength and security and to consign to the past the security issues surrounding our previous parent. We now expect Standard & Poor’s to resolve our credit watch very shortly and to confirm our new rating in the ‘BBB’ category.
Contrary to market speculation our business has actually traded well throughout the period of the sale and we are already seeing levels of support increase following the earlier news confirming the interest of Ageas. As Barry has said, we are now well and truly open for business.
*Based on analysis of Datamonitor/Synthesis 2011 market share data except for Admiral where total premiums are sourced from annual reports