After recent media speculation it has now been announced that insurer Allianz and Liverpool Victoria Friendly Society (LV=) are to launch a joint venture under the LV= brand, which will create the third largest personal insurance company in the UK.
Earlier this week media reports had claimed a deal was close to being reached, and that an announcement could be made by the end of this week.
Under the terms of the joint venture Allianz will initially pay LV= £500 million for a 49% stake in its general insurance business, with LV= holding the other 51%. By 2019, Allianz is required to pay a further £213 million for an additional 20.9% stake in the firm’s general insurance unit, taking its share to 69.9% in the second step of the deal.
Furthermore, LV= has included an option that allows it to sell all or part of its remaining shares to Allianz.
Overall, 100% of LV= general insurance unit is valued at £1.020 billion, and the deal remains subject to regulatory approval.
The transaction is expected to create the third largest personal insurer in the UK, and enables Allianz to take a leading role in the UK retail sector, and provides LV= with additional financial strength and expertise to expand its business operations.
Chief Executive Officer (CEO) of Allianz Group, Oliver Bäte, said; “I am thrilled to join forces with LV=, one of UK’s most respected and loved brands. This partnership will first and foremost benefit our customers who will have access to an expanded range of products backed by the financial strength of Allianz. We value LV=’s strong brand and market positioning.”
LV= CEO, Richard Rowney, said; “I am delighted to announce this joint venture with Allianz, which will see us create the third largest personal insurance business in the UK. With this deal, LV= has a positive future in both General Insurance and Life and Pensions. The strategic partnership with Allianz will allow us to continue to benefit from a growing personal insurance business while also enabling us to strengthen our capital position, leaving us well placed to continue to expand our Life and Pensions business and pursue new digital opportunities.”
Allianz Insurance CEO, Jon Dye, added; “I am delighted that two organizations with excellent reputations in both personal and commercial lines have forged a landmark partnership with the twin aims of benefiting customers and generating profitable growth.”
The joint venture will be led by Steve Treloar, Managing Director of General Insurance at LV=, who said; “Our joint venture will be a leading personal insurer with a diversified distribution base across direct, broker and corporate partner channels. The combination of LV=’s strong brand, longstanding reputation in personal insurance and excellent customer service with the financial strength, digital expertise and data analytics of Allianz, the world’s largest P&C insurer, will allow us to further develop and expand the products and services that our customers demand.”