Aviva to return to Lloyd’s of London for first time in two decades

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Aviva will have a presence at the Lloyd’s of London specialist insurance market for the first time in more than two decades after it announced the £242mn acquisition of Probitas.

The group’s chief executive Amanda Blanc said on Monday the deal “opens up new opportunities to accelerate growth” in Aviva’s general insurance business. It will bolster the group’s global corporate and speciality business, after a year-long swing higher in commercial insurance prices.

Probitas, which provides a range of insurance from professional liability to property catastrophe cover, will retain its management team and brand after the deal. Aviva intends to provide additional capital to the unit.

It includes the rights to Syndicate 1492, one of the underwriting units in the Lloyd’s market, which took in gross written premium of £288mn in 2023 and has grown that by a fifth every year since 2019.

Over the same period, Probitas has achieved a combined ratio — claims and expenses as a proportion of premiums — of 82 per cent. Anything below 100 per cent represents a profit.

“Strong growth is expected to continue during 2024, driven by favourable pricing trends, new product lines and expanded local distribution in key markets,” Aviva said. The insurer left the Lloyd’s market in 2000 through a disposal.

The business said Lloyd’s represented a “major source of untapped growth for Aviva, offering access to significant in-appetite premium volumes, international licences and broader distribution networks”.

The deal comes after a long period of rising insurance prices have lifted the specialist insurance market. Last month, Japanese insurer Mitsui Sumitomo said it would increase its underwriting capacity at Lloyd’s and the wider so-called company market that surrounds it.

It also underlines the health of the global insurance market in London, which remains a global hub for the sale of insurance and reinsurance covering risks from hurricanes to cyber attacks.

Last year, the market’s chief executive John Neal, who is also leading a push to open up the market to outside investors, said insurance spending was set to double in the next decade, driven by a greater perception of risks such as climate change.