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Yorkshire Post - - BUSINESS - GREG WRIGHT DEPUTY BUSI­NESS EDI­TOR ■ Email: greg.wright@ypn.co.uk ■ Twit­ter: @greg­wrightyp

In­sur­ance gi­ant Aviva grows pres­ence as it makes £116m swoop for Ir­ish ri­val

IN­SUR­ANCE GI­ANT Aviva has swooped for Ir­ish ri­val Friends First in a £116m deal that would make it one of Ire­land’s largest in­sur­ers.

The FTSE 100 group said the takeover would bol­ster its share of the life in­sur­ance mar­ket to 15 per cent with hopes of fur­ther growth as the Ir­ish econ­omy ac­cel­er­ates.

Aviva, which em­ploys around 2,000 staff in York and 1,500 staff in Sh­effield, said it dove­tailed with its strat­egy to make “bolton” ac­qui­si­tions in ar­eas where it has a sig­nif­i­cant op­er­a­tion or a com­pet­i­tive ad­van­tage.

It added that the Ir­ish econ­omy had mounted a “ro­bust re­cov­ery” and the prospect for fur­ther growth “re­mained strong”.

Mau­rice Tul­loch, chief ex­ec­u­tive of Aviva In­ter­na­tional In­sur­ance, said: “Friends First is a nat­u­ral fit for Aviva Ire­land. The ac­qui­si­tion will en­hance Aviva Ire­land’s prod­uct of­fer­ing and ac­cel­er­ate our in­ter­na­tional growth agenda.

It makes sense fi­nan­cially, strate­gi­cally and for our cus­tomers. Mau­rice Tul­loch, chief ex­ec­u­tive of Aviva In­ter­na­tional In­sur­ance

“It makes sense fi­nan­cially, strate­gi­cally and for our cus­tomers.

“Our Ir­ish busi­ness has been among the best per­form­ers in the Aviva group over the last cou­ple of years. This ac­qui­si­tion un­der­lines Aviva’s dis­ci­plined ap­proach to de­ploy­ing cap­i­tal into bolt-on ac­qui­si­tions that meet our strict fi­nan­cial cri­te­ria and strengthen our busi­nesses.”

While the deal still needs to win the back­ing of reg­u­la­tors, Aviva ex­pects the takeover to be com­pleted by the first quar­ter of next year.

Friends First has more than 250,000 cus­tomers and pro­vides life pro­tec­tion, pen­sion and in­vest­ment prod­ucts for both com­pa­nies and in­di­vid­u­als.

The 180-year-old firm is cur­rently owned by Dutch in­surer Ach­mea Hold­ing NV and has mar­ket share of 6 per cent.

John Quin­lan, chief ex­ec­u­tive of Aviva Ire­land, said: “Friends First is an ex­cel­lent busi­ness and will be a great ad­di­tion to Aviva Ire­land.

“Their ex­per­tise in the area of in­come pro­tec­tion and group risk, in par­tic­u­lar, will com­ple­ment and strengthen the broad range of in­sur­ance prod­ucts we of­fer our cus­tomers.

“It will also make us the lead­ing in­surer for bro­kers in the Ir­ish mar­ket. To­gether, our mar­ket lead­ing in­sur­ance busi­ness will be well placed to take full ad­van­tage of Ire­land’s fast grow­ing econ­omy.”

Aviva re­ported a steep rise in first-half prof­its in Au­gust af­ter it was boosted by its gen­eral in­sur­ance di­vi­sion.

Op­er­at­ing profit grew 11 per cent to £1.46bn in the first six months of the year, with the gen­eral in­sur­ance and health prof­its jump­ing 25 per cent to £417m.

An­a­lysts from JP Mor­gan Cazen­ove said: “This ac­qui­si­tion is just an ex­am­ple of Aviva con­sol­i­dat­ing its busi­nesses wherein it is ex­it­ing small/low mar­ket share non-core busi­nesses and is ex­pand­ing in core mar­kets where it al­ready has a strong po­si­tion.”

JP Mor­gan Cazen­ove added that Aviva was in a strong po­si­tion to gen­er­ate about £10bn in cash from sub­sidiaries and dis­pos­als dur­ing 2016-2019.

The in­surer has pulled back from sev­eral mar­kets this year, sell­ing its stake in three Span­ish joint ven­tures, its Ital­ian joint ven­ture, part of its French busi­ness and its Tai­wan joint ven­ture stake, to fo­cus on core mar­kets in­clud­ing Bri­tain and Canada.

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