Marking its entry into the UK insurance market, Insurance Australia Group has acquired Hastings Insurance Services and Advantage Insurance Company, two UK insurers that specialize in motor insurance.
Hastings is the UK’s fifth largest motor insurance broker, trading under the names of Hastings Direct and Peoples Choice. Advantage, meanwhile, is a direct personal lines insurer specializing in motor insurance.
Hastings, which also offers motorcycle and home insurance, is on track to achieve around GBP200 million in gross written premiums through its broker business this calendar year, while Advantage is expected to underwrite GBP100 million in gross written premiums.
The purchase price is 1.2 times net assets for Advantage and 10.5 times anticipated calendar year 2006 earnings for Hastings. In total, the purchase price is GBP140 million.
Our strategy in mature markets like the UK is to target successful general insurance businesses, primarily in motor, where we can access new customers and local market expertise, while leveraging our product, underwriting and claims expertise to enhance their growth profile, commented Insurance Australia Group CEO Michael Hawker. This acquisition fits that mould.
The purchase, which will be funded from surplus capital and term debt, is subject to regulatory approval.