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CORRECTED-UPDATE 1-Aviva buys Canadian RBC's general insurance business for $400 mln

Published 2016-01-22, 05:26 a/m
© Reuters. CORRECTED-UPDATE 1-Aviva buys Canadian RBC's general insurance business for $400 mln
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(In JAN 21 story, corrects to show RBC to make gain, paragraph
7)
LONDON, Jan 21 (Reuters) - British insurer Aviva AV.L said
on Thursday it was buying Canadian bank RBC's RY.TO general
insurance arm for C$582 million ($403 million) and had agreed a
distribution deal, to diversify its business in Canada.
Aviva Chief Executive Mark Wilson has said the life and
general insurer was interested in "bolt-on" acquisitions, after
it bought rival UK life insurer Friends Life for 5.6 billion
pounds ($7.9 billion) last year.
Canada is the group's second biggest general insurance
market after the UK.
Around 575 RBC Insurance employees will become part of Aviva
Canada's operations as a result of the acquisition of RBC
General Insurance, Aviva said in a statement.
Aviva Canada has also entered a 15-year agreement with RBC
Insurance which enables RBC Insurance customers to buy Aviva
Canada's property and casualty (P&C) insurance products, Aviva
added.
"This new partnership extends Aviva's presence in general
insurance, brings additional diversification benefits to the
group and presents excellent opportunities for revenue and
earnings growth in the attractive Canadian market," Wilson said.
RBC said in a statement it will make an estimated net
after-tax gain of C$200 million on the deal. Aviva said the deal
would increase Aviva Canada's annual gross written premiums by
around 20 percent.
Aviva posted first-half pre-tax operating profits of 1.17
billion pounds ($1.65 billion), including 131 million pounds
from Canada.
Aviva's shares were up 2 percent at 459 pence at 1412 GMT.
($1 = 1.4457 Canadian dollars)
($1 = 0.7088 pounds)

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