Latest reaction from NIG, as RSA makes a bid to acquire the brand;
Today we are sharing some exciting news that, subject to shareholder approval, Direct Line Group has reached an agreement with RSA, part of the Intact Group, to acquire NIG alongside its agriculture division, FarmWeb, and partner proposition, UKI Business Solutions which trades as Churchill Expert. The transaction will result in the transfer of renewal rights, brands, employees and some systems, to create the third largest Commercial Lines insurer by GWP in the UK.
We are delighted to be joining forces with RSA to harness the joint assets of our organisations; in people, in product and in proposition. Between us exists a true complement & synergy in business ambition:
- NIG’s strength of relationships, distribution and quality of people in the SME space
- RSA’s strong legacy, experience and depth of product range
- A joint determination to be best in class by outperforming in the UK Commercial Lines market.
Our coming together adds scale and brings opportunity to our business and NIG will have a parent who values and respects what we do, how we do it and wants to invest to develop our future. The new entity will create more opportunities, for our business, for you and importantly, our customers. We will deepen relationships with existing customers and look forward to developing relationships with new ones. We are determined to continue to improve the service we provide to our customers through a more comprehensive proposition right across the commercial insurance portfolio.
This is a milestone moment for our business. Work now gets underway to move us swiftly through the next phase of the transaction. In the meantime, you’ll continue to work with the same NIG, it is very much business as usual. Both NIG and RSA have a strong desire to achieve a smooth transition with minimal disruption – we will maintain frictionless trading and positive momentum and we will continue to look after you and your customers as we always have.
Sonya Bryson, acting Managing Director of Commercial, said “I’m delighted we are announcing an agreement for the acquisition of NIG, FarmWeb and UKI Business Solutions by RSA and Intact today. I know this new organisation will be a force to be reckoned with and the collective strength of our brands, our people and our relationships with customers give us boundless potential to achieve deeper, broader and more meaningful customer outcomes.”
Lee Mooney, Managing Director of RSA Commercial UK, said “This transaction will significantly strengthen our Commercial Lines business with a strong investment into our SME and mid-market propositions, broaden our broker distribution network and online capabilities, and expand our current product offering to agricultural and packaged products, making us a more complete proposition for our clients and brokers. Direct Line Group’s brokered Commercial Lines business is renowned for its strong and extensive broker partnerships and delivering tailored insurance propositions for UK SME customers. I look forward to welcoming even more experienced and highly talented colleagues to our RSA and Intact family. ”
We expect a vote by shareholders to be concluded in October, at which stage we will begin to discuss our transition plans with you in more detail. In the meantime if you have any further questions, please speak to your usual NIG, FarmWeb or Churchill Expert contacts.
RSA STATEMENT
RSA published a release yesterday on their acquisition plans, here’s the word;
Intact Financial Corporation (TSX: IFC) (Intact, IFC or the Company) and its subsidiary RSA today announced that they have reached an agreement with Direct Line Insurance Group plc (Direct Line) to acquire Direct Line’s brokered Commercial Lines operations. The purchase price includes an initial cash consideration of £520 million (C$884 million), with potential for up to a further £30 million (C$51 million) contingent payment under earn-out provisions relating to the financial performance of the acquired business lines. The transaction will result in the transfer of renewal rights, brands, employees, and systems to RSA.
Direct Line’s brokered Commercial Lines generated written premiums[4] of £530 million in 2022, and delivered an average combined ratio[5][6] of approximately 96% across 2021 and 2022.
The transaction has been unanimously approved by the Boards of Directors of both Intact and Direct Line, and is subject to approval by Direct Line’s shareholders (Direct Line Shareholder Approval).
Ken Norgrove, Chief Executive Officer, RSA, added: “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.”
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