Aviva to Acquire Canadian Vehicle Replacement MGA Optiom for Circa £100m

Aviva plc announced the acquisition of Optiom O2 Holdings Inc. from Novacap and other minority shareholders for a consideration of approximately £100 million (US$126 million).

Calgary, Canada-based Optiom, which operates as a managing general agent (MGA), is a provider of vehicle replacement insurance in Canada and offers flexible payment options to customers.

As a specialty insurance provider, Optiom offers unique solutions to supplement customers’ primary auto insurance coverage, according to Optiom’s website. “Underlying primary insurance may only pay the actual cash value of [the] vehicle in the event of a total loss, leaving [the customer] underinsured.”

The acquisition expands Aviva’s capital-light businesses, which make up over half of Aviva’s portfolio, while also increasing Aviva Canada’s presence in a profitable segment of the Canadian insurance market, Aviva said.

Aviva Canada is an existing underwriting capacity provider for Optiom. The transaction provides an opportunity for Aviva Canada to increase its access to an attractive specialty line of business, while securing a stable, growing stream of distribution income, Aviva said, noting that Optiom’s strong distribution relationships will allow Aviva Canada to reach additional customers, “who will receive best-in-class service alongside existing Aviva Canada customers.”

“The acquisition strengthens our offering and distribution capabilities in a highly attractive segment of the Canadian insurance market. We know Optiom well through our existing relationship and are excited about what we can do together to better serve our brokers and customers,” commented Tracy Garrad, chief executive officer of Aviva Canada.

The transaction is subject to customary closing conditions including regulatory approvals and is expected to close in Q1 2024.

Source: Aviva