Home / Insurance Tips / Aviva Canada Inc to buy RBC General Insurance Company for $582 million

Aviva Canada Inc to buy RBC General Insurance Company for $582 million

Aviva Canada Inc announced today that it was buying RBC General Insurance Company and has formed a 15-year strategic agreement with RBC insurance in a deal worth $582 million.

Royal Bank of Canada is selling its home and car insurance business to Aviva Canada Inc. for $582 million inside a deal that includes a 15-year distribution arrangement allowing the financial institution to continue selling a “full suite” of insurance products.

RBC leader Dave McKay indicated last year the bank was not necessarily dedicated to long-term ownership of RBC General Insurance Co., which holds about two per cent market share.

Thursday’s sale seems to acknowledge the abandonment of a long-held hope that Canadian banks would be permitted to sell insurance within their branches, said Rob Sedran, a bank analyst at CIBC World Markets.

“The bank was sub-scale in P&C (property and casualty) insurance partly owing to the fact that it is prohibited from selling insurance through its vast branch network,” the analyst wrote in a note to clients.

“It appears that hope gave way to the reality that those regulations are unlikely to alter anytime soon.”

RBC pushed difficult to win access to one-stop looking for banking and insurance products within the bank’s extensive network of branches. After losing an offer in 2006, the bank began opening separate insurance sales offices right next door to some of its branches. Bank of Quebec followed suit, though on a smaller scale.


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