General Insurance Article - AXA - Potential acquisition of Genworth Lifestyle Protection


AXA announced today that it has entered into exclusive negotiation with Genworth Financial for the terms of its potential acquisition of 100% of Genworth Lifestyle Protection Insurance (“Genworth LPI”), which would be for a total cash consideration of Euro 475 million.

  

     
  1.   This acquisition would be a milestone in the development of AXA credit and lifestyle protection activities, which are currently operated by AXA Creditor, and accelerate AXA’s business mix shift towards more Protection products, in line with the Ambition AXA strategy
  2.  
  3.   The combined operations would rank #3 within the creditor insurance market in Europe, with a 9% market share1, and would be a European leader in credit and lifestyle protection
  4.  
  5.   Total consideration would amount to Euro 475 million, representing an implied 0.65x book value multiple as of end of FY14
 Genworth LPI is the #7 creditor insurance player in Europe (with 4% market share1), providing credit and lifestyle protection insurance. The company benefits from a broad distribution network based on well-established relationships with a wide range of leading financial institutions. Over the past years, it has built a strong competitive advantage with its proprietary IT platform providing centralized data and strong scalability.
  
 This transaction would complement AXA’s credit and lifestyle protection activities presence in key mature markets such as France, Germany and Italy and would provide entry into new markets with strong fundamentals, notably the Nordics and Southern Europe. It would also support the Group’s acceleration in high growth markets such as China, Latin America, Turkey and Poland. Moreover, with Genworth LPI’s strong and lasting relationships with major banks, insurance companies and auto finance providers, AXA credit and lifestyle protection activities would be able to double their portfolio of strategic partners in Europe.
  
 The proposed transaction is subject to customary conditions, including completing a works council consultation process and obtaining required regulatory approvals, and should be finalized before the end of 2015. Further financial implications of this transaction, which is expected to be modestly accretive to underlying earnings, will be disclosed at a later stage.
  
 “This operation would be another milestone in AXA’s ambition to become a leading global provider of credit and lifestyle protection, a business in which we operate today through the AXA Creditor brand. It would represent a unique opportunity to obtain a scalable footprint in Europe and capture additional business potential in high growth markets. This transaction would also contribute to bringing our global expertise to the next level thanks to significant technical skills, a reinforced range of administration and digital tools as well as an enlarged products portfolio. We are particularly enthusiastic at the idea of supporting Genworth LPI in this new development phase, in the best interests of both its clients and employees”, said Denis Duverne, Deputy Chief Executive Officer of AXA.
  
 1 Source: Finaccord Creditor Insurance in Europe PartnerBASE and market model (2014). Market shares and rankings based on the weighted share of non-captive partnerships across the creditor insurance market related to consumer finance and credit cards in Europe.

Back to Index


Similar News to this Story

Quoted car insurance premiums falling at a record rate
Average quoted premiums drop by 6.0% in past three months – the biggest fall on record – and by 8.8% in the past year. In January, motorists most comm
More robust flood defence planning vital
With new data suggesting that over 100 000 new homes could be built in flood-prone areas in the next five years, Swiss Re’s CEO P&C Reinsurance for UK
2024 year end review for non life insurance run off deals
PwC has just published its 2024 year-end review of non-life insurance run-off deals, which provides an overview of transaction activity and a list of

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.