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.
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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.
