Belgian insurer Ageas said it reached an agreement with Bain Capital to acquire Esure, a digital personal lines insurer “with strong positioning on price comparison websites (PCW) in the UK” for £1.295 billion in cash.
Esure’s brands include Esure, Sheilas’ Wheels and First Alternative.
“The combination of Ageas UK and Esure will create the third largest UK personal lines platform with a balanced and diversified distribution spanning Direct PCW, brokers and partnerships,” said Ageas.
“The acquisition of esure will enable Ageas UK to accelerate the diversification of its distribution strategy into the important PCW channel in the UK market.
“Its underwriting footprint will widen Ageas UK’s target customer demographics and enable growth to a top-line of GBP 3.25 billion (EUR 3.8 billion) by 2028.
“Ageas UK has established itself as an accomplished insurer over the past four years by focusing on profitable growth solely in the personal lines business with a specialism in broker distribution, outstanding technical insurance skills and technology, and successfully delivering insurance solutions for its distribution partners and over 4 million customers.
“Esure is a leading UK personal lines insurer with a fully digital distribution model through the PCW channel and three popular brands – Esure, Sheilas’ Wheels and First Alternative. In 2024, Esure had more than 2.1 million policies and GWP of over GBP1 billion (EUR 1.2 billion).
“The acquisition of esure creates significant potential for operational synergies and capital benefits to be realised in the medium term.
“We expect economies of scale in our UK personal lines portfolio and the accelerated implementation of the EIS IT platform, including esure’s complementary claims module, to drive operational efficiencies and cost avoidance for Ageas UK.
“Continued focus on technology, data and AI is expected to create further competitive advantages. In addition, capital benefits from enhanced diversification and the inclusion of esure in Ageas’s partial internal model are expected to emerge over time.
“Under the terms of the transaction, Ageas will pay Bain Capital a cash consideration of GBP 1.295 billion (EUR 1.510 billion) for esure, respecting a Solvency II target ratio of 150% as at year-end 2024. The group’s capital position will remain robust with Solvency II ratio expected to decrease by approximately only 10pp thanks to the inclusion of around EUR 1 billion of Own Funds instruments in the financing mix.
“The transaction will be financed through a combination of surplus cash and newly issued senior and hybrid debt and/or equity within the existing authorisations and subject to market conditions. A fully underwritten 2-year bridge facility is provided by BofA Securities and Deutsche Bank Luxembourg S.A.”
Ageas Group CEO Hans De Cuyper said: “In recent years, Ageas has experienced significant growth in the UK, making it an increasingly important part of the Group. This transaction will allow us to offer competitive value propositions to a wider customer profile via a multi-channel distribution model, positioning Ageas UK as one of the top three personal lines insurers.
“Acquiring esure also supports our strategic ambitions of re-balancing our Group profile towards businesses with high cash conversion. We remain, of course, committed to our Elevate27 financial objectives, including our commitment to a progressive dividend policy, and will observe the full synergies of this transaction in the forthcoming strategic period.”