Allianz pays £500m for stake in LV= arm

GERMAN insurance giant Allianz has confirmed it has struck a joint venture deal with British firm LV=, creating the UK’S third largest personal insurer.

Allianz will pay £500m to LV=, formerly known as Liverpool Victoria, in exchange for a 49pc stake in its general insurance (GI) business, with the deal expected to close in the second half of this year.

A second stage to the transaction will take place in 2019, with Allianz due to pay a further £213m for an additional 29pc stake in LV= GI.

LV= has a put option under which it can sell all, or part of, its remaining shares to Allianz. The deal values the business overall at £1.02bn.

The joint venture will incorporate Allianz’s personal, home and motor insurer’s renewal rights and LV=’S commercial insurer’s renewal rights.

It will operate under the LV= brand name and will boast more than £1.7bn in annual premium income. Oliver Bäte, the chief executive of Allianz, said: “This partnership will first and foremost benefit our customers who will have access to an expanded range of products backed by the financial strength of Allianz.

“We value LV=’S strong brand and market positioning.”

Richard Rowney, the chief executive of LV=, added: “The strategic partnership with Allianz will allow us to continue to benefit from a growing personal insurance business while also enabling us to strengthen our capital position, leaving us well-placed to continue to expand our life and pensions business and pursue new digital opportunities.”