LONDON: Aviva has entered into a 10-year distribution deal with HSBC in what the insurer says is one of the largest transactions of its kind signed in the UK. Mark Wilson, the insurer’s chief executive, said the agreement would generate hundreds of millions of pounds of premiums for Aviva, and that it had fought off rivals to the deal.
“It’s a very good win for us,” he said. Although price comparison sites and direct sales are increasingly important for the insurance industry, banks are still a prominent source of distribution and insurers often pay large sums to secure so-called bancassurance tie-ups.
Aviva did not release any financial details of the deal, which covers policies such as car and home insurance and expands an agreement the companies had in place. The news came as Aviva reported its results for the first six months of the year. General insurance took centre stage, with profits rising by 25 per cent thanks to a stronger underwriting result and the inclusion of a Canadian business bought last year.
Profits from life insurance – a much bigger part of the group – rose 8 per cent to £1.3bn. The UK annuity and equity release business increased its earnings by a quarter. Overall, operating profits jumped by just over a tenth to £1.46bn, while the dividend was increased by 13 per cent to 8.4p per share.