Admiral Group’s Share Price Rose on Purchase of RSA’s Business

The Admiral Group plc (LON: ADM) share price increased after RSA and its parent company, Intact Financial Corporation, announced their exit from the UK personal lines market by selling their direct personal lines operations to Admiral Group.

his operation encompasses both home and pet insurance lines. The decision stems from a strategic review, culminating in RSA withdrawing from its UK home and pet partner and broker agreements.

Previously, RSA had hinted at a potential departure from the personal lines market. In March, the company announced its withdrawal from the motor insurance sector. 

A significant development followed this in September, when RSA acquired the brokered commercial lines operations of Direct Line Group (DLG) and began evaluating strategic alternatives for its UK personal lines division, including a potential sale.

The sale, which has been finalised and received approval from the boards of Intact and Admiral, is anticipated to be completed by the end of the first quarter of 2024. RSA’s UK direct personal lines business, valued at approximately £165 million in annual premiums, will be transferred to Admiral. 

Approximately 300 RSA staff members will transition to Admiral in this agreement, which also involves transferring the More Than brand. 

The transaction includes a cash consideration of £82.5 million, with a potential additional payment of up to £32.5 million, contingent on meeting specific retention criteria. The cumulative financial gain from this sale and the release of capital tied to the UK personal lines business will benefit RSA by around £350 million.

Moreover, RSA plans to exit its UK home and pet partner contracts, valued at approximately £515 million. The company is exploring avenues to transfer these arrangements or allow them to expire gradually.

Charles Brindamour, the CEO of RSA owner Intact, said: “The exit from the UK personal lines market sharpens RSA’s focus as a leading UK commercial and speciality lines player, accelerating our ability to deliver sustainable outperformance in the UK and Ireland segment.”

Milena Mondini de Focatiis, the CEO of Admiral Group, added: “Increased scale in home and pet not only supports Admiral’s diversification strategy but also supports our aim to provide customers with a more robust multi-product offering, choice and convenience. We look forward to welcoming our new colleagues and their additional expertise.

Admiral Group share price chart. 

The Admiral Group share price increased after acquiring the RSA’s direct personal lines operations.