Allianz to form joint venture with LV=

German insurer Allianz Group and LV= have agreed to launch a joint venture and a longer-term strategic partnership in the UK, creating a general insurance business with over 6 million customers and gross premiums written in excess of £1.7bn.

Allianz will pay £500m for a 49% stake in LV=’s general insurance businesses. The JV will acquire Allianz’s personal home and motor insurer’s renewal rights while AIlianz will obtain LV= GI’s commercial insurer’s renewal rights.

The second stage of the deal will see Allianz pay £213 million for a further 20.9% stake in LV= GI through an agreed, forward purchase based on a total valuation of £1.02bn for 100% of LV= GI.

The first part of the deal is expected to close in the second half of this year, while the second phase is expected to take place in 2019.

Oliver Bäte, chief executive officer of Allianz Group, said: “I am thrilled to join forces with LV=, one of UK’s most respected and loved brands. This partnership will first and foremost benefit our customers who will have access to an expanded range of products backed by the financial strength of Allianz. We value LV=’s strong brand and market positioning.”

Meanwhile, LV=’s chief executive, Richard Rowney, said: “I am delighted to announce this joint venture with Allianz, which will see us create the third largest personal insurance business in the UK. With this deal, LV= has a positive future in both General Insurance and Life and Pensions. The strategic partnership with Allianz will allow us to continue to benefit from a growing personal insurance business while also enabling us to strengthen our capital position, leaving us well placed to continue to expand our Life and Pensions business and pursue new digital opportunities.”