Intact Financial Corporation and its subsidiary RSA have reached an agreement to sell RSA’s UK direct Personal Lines operations, representing approximately £165 million of annual premiums, to Admiral Group.
The transaction will result in the transfer of renewal rights, brands and employees, and has been approved by the Boards of Directors of both Intact and Admiral.
The deal is expected to close at the end of Q1 2024, with RSA set to retain the claims reserves, which Intact said will be run off over time.
“RSA will also exit its UK Home and Pet partner and broker contracts representing annual premiums of approximately £515 million,” Intact explained.
The firm added that RSA is exploring options to either transfer these arrangements to other parties or let the contracts expire over time.
The sale price for RSA’s direct Home and Pet operations includes an initial cash consideration of £82.5 million, with a potential additional payment of up to £32.5 million, subject to the fulfilment of certain retention thresholds.
In aggregate, Intact said the proceeds from the sale to Admiral and the release over time of capital backing the UK Personal Lines business are expected to total approximately £350 million, including the benefit of earnout provisions.
Charles Brindamour, Chief Executive Officer, Intact Financial Corporation, said, “The exit from the UK personal lines market sharpens RSA’s focus as a leading UK commercial and specialty lines player, accelerating our ability to deliver sustainable outperformance in the UK&I segment.”
Ken Norgrove, Chief Executive Officer, RSA, added, “We recognize the important work of our Personal Lines colleagues in building RSA’s leading Home and Pet businesses.
“I’m confident that Admiral’s shared values and track record in delivering excellence for customers makes them a perfect fit for our UK direct Personal Lines business. Our focus is on ensuring an orderly transition that supports our customers, colleagues and partners.”
In related news, Intact and RSA recently completed the acquisition of Direct Line’s brokered Commercial Lines operations, representing annual written premiums of approximately £530 million. This transaction significantly strengthened RSA’s outperforming Commercial Lines business.
Following the subsequent exit of UK Personal Lines, Intact’s continuing UK&I operations are expected to generate £2.8 billion of premiums in 2024. Approximately 95% of UK&I direct premiums written will be attributable to Commercial and Specialty Lines, with the remainder coming from Personal Lines in Ireland.
