French insurer’s UK operations acquired for £116m

Ageas UK chief executive Barry Smith and Groupama UK chief executive Francois-Xavier Boisseau

Ageas has confirmed that agreement has been signed to acquire Groupama Insurance Co Ltd for £116m, ending speculation as to the fate of the UK arm of the troubled French insurer.

The deal will see Ageas boost its book of business to become fifth largest UK non-life insurer, with a 5.2% market share, and will strengthen its presence in the UK broker market.

Ageas chief executive Barry Smith said: “This deal is a great strategic fit in the continuing development of Ageas in the UK. Both Ageas and GICL have strong reputations in the UK broker market and this deal reinforces our ongoing commitment to brokers and their customers. We pride ourselves on strong relationships with brokers, and today’s announcement sends a clear signal that we will continue to support and work closely with them.”

The acquisition follows Ageas’s mega-deal with Tesco underwriting and a string of acquisitions, including Kwik-Fit Financial Services and Castle Cover.

On completion of the transaction, GICL will become a wholly owned subsidiary of Ageas UK.

Groupama UK’s parent company, Groupama SA, decided to sell its valuable UK asset in January to relieve pressure on its exposure to the eurozone crisis. Following the announcement, Groupama SA’s Standard & Poor’s rating was downgraded to BB from BBB-, known as ‘junk’ status. This forced many brokers to heavily restrict trade with the UK arm, despite Groupama UK’s capital being ring-fenced from the main group.

The acquisition will increase Ageas’s annual gross written premiums by about 20% to more than £2.1bn.