In interesting news on UK stocks, insurance giant Aviva PLC (GB:AV) is acquiring Lloyds’ syndicate member Probitas Holdings Limited in a £242 million deal. The acquisition marks Aviva’s re-entry, after nearly two decades, into the very lucrative Lloyd’s insurance market with an established Lloyds platform and other insurance subsidiaries.
More on the Deal
For Aviva, adding Probitas means increasing the value proposition of the Global Corporate & Specialty (GCS) business unit under its General Insurance business. The Lloyd’s market offers an attractive opportunity to Aviva, giving it access to premium volumes, international licences, and well-established distribution networks. Plus, Probitas has a proven track record of disciplined underwriting and profitability.
The deal is expected to close in mid-2024, subject to closing conditions. Probitas’ existing team will be retained to continue operating the business and use the Probitas brand name.
Probitas’ Syndicate 1492 reported a gross written premium (GWP) of £288 million in 2023, reflecting a CAGR (compound annual growth rate) of 21% since 2019. Moreover, the entity boasts a record average combined ratio of 82% over the same period. For 2024, Probitas projects recording a GWP of £400 million, spread across underwriting platforms in London, Manchester, Australia, Europe, Mexico, and Canada.
Is Aviva a Good Investment?
Today, Barclays analyst Larissa Van Deventer reiterated a Hold rating on AV stock with a price target of 480.00p (around 7% upside potential).
On TipRanks, AV stock has a Moderate Buy consensus rating based on four Buys and two Hold ratings. The Aviva plc share price forecast of 485.00p implies 8.4% upside potential from current levels.
