Intact Financial and RSA to acquire Direct Line’s commercial unit
Intact Financial Corporation and its subsidiary RSA have reached an agreement to acquire Direct Line’s brokered commercial lines operations. The purchase price includes an initial cash consideration of £520 million, with potential for up to a further £30 million contingent payment under earnout provisions. The transaction will result in the transfer of renewal rights, brands, employees, and systems to RSA.
Direct Line’s commercial unit generated written premiums of £530 million in 2022, and delivered an average combined ratio of approximately 96% across 2021 and 2022.
The transaction has been approved by the boards of directors of both Intact and Direct Line, and is subject to approval by Direct Line’s shareholders.
To accelerate its outperformance ambition, Intact is also exploring strategic options in respect of RSA’s UK Personal lines business, including a possible sale. RSA had previously announced its exit from the UK Personal Lines motor market in March 2023, as well as outlined plans to optimize its Home and Pet platforms.
“This acquisition significantly strengthens our UK&I business, and is strongly aligned with our strategic and financial objectives. The transaction enhances our position in the UK by doubling down on lines of business where we already outperform.” – Charles Brindamour, CEO, Intact Financial Corporation.
“We look forward to welcoming a team of experienced, highly talented and skilled colleagues from strong brands, including NIG and FarmWeb, to further enhance RSA’s strong Commercial Lines business.” – Ken Norgrove, CEO, RSA.