The acquisition of Friends First, currently owned by Dutch insurer Achmea Holding NV, by Aviva means its market share in life insurance in Ireland will increase to 15%, alongside its existing 15% market share in general insurance.
In an announcement Aviva said the transaction is in line with its strategy to allocate capital in selected markets where it has scale or competitive advantage and where it can further expand its range of products across life and general insurance.
Enhance product offering
Maurice Tulloch, chief executive of Aviva International Insurance, said the acquisition will enhance Aviva Ireland’s product offering and accelerate our international growth agenda.
“It makes sense financially, strategically and for our customers,” Tulloch said.
“Our Irish business has been among the best performers in the Aviva group over the last couple of years. This acquisition underlines Aviva’s disciplined approach to deploying capital into bolt-on acquisitions that meet our strict financial criteria and strengthen our businesses,” he said.
Aviva said the Irish economy has experienced a robust recovery in recent years and the prospects for continued growth remains strong. The life insurance market in Ireland has grown by approximately 9% since 2014.
Friends First focuses on life protection, pension and investment products for individuals and companies. It has more than 250,000 customers, a market share of 6% and reported operating profit growth at HY 2017 of 12%.
The transaction is subject to regulatory approval and is expected to complete in the first quarter of 2018. The price paid represents a multiple of 0.8x Friends First’s adjusted net asset value.