Aviva has officially declared its acquisition of Optiom O2 Holdings Inc (Optiom) from Novacap and other minority shareholders.
The approximately £100 million (around CA$170 million) deal entails Aviva assuming control of a prominent managing general agent (MGA) in Canada, recognized for its vehicle replacement insurance offerings and flexible payment options for customers.
As per a news release, the agreement signifies a substantial expansion of Aviva’s capital-light business ventures, which already constitute over half of the company’s portfolio. Specifically, the deal bolsters Aviva Canada’s presence in a profitable niche of the Canadian insurance market.
Having previously served as an underwriting capacity provider for Optiom, Aviva views the deal as an opportunity to deepen its involvement in a lucrative line of business and secure a stable and growing source of distribution income. The acquisition aligns with Aviva’s capital management framework, consistent with the company’s strategy, the firm stated. Aviva remains focused on delivering regular and sustainable returns of surplus capital.
“The acquisition strengthens our offering and distribution capabilities in a highly attractive segment of the Canadian insurance market. We are familiar with Optiom through our existing relationship and are enthusiastic about what we can achieve together to better serve our brokers and customers,” remarked Aviva Canada CEO Tracy Garrad.
Subject to standard closing conditions, including regulatory approvals, the transaction is anticipated to conclude in the first quarter of 2024.
In other developments, Aviva also thwarted £120 million in fraudulent payouts after discovering more than 9,250 instances of insurance fraud in 2022.