HSBC chooses Aviva for general insurance venture
HSBC Bank plc and Aviva plc today announced plans for the creation of a joint venture, under the ‘HSBC Insurance’ brand, that aims to be a top-10 player in the UK general insurance industry*.
Under the terms of the planned joint venture, HSBC Bank plc and Norwich Union Insurance, the UK general insurance arm of Aviva plc, will underwrite and distribute general insurance products to HSBC’s 10.2 million customers in the UK. Approximately one-fifth of all UK consumer spend on financial services goes to insurance products and the general insurance industry generated £36 billion in premiums in 2005.
Dyfrig John, Chief Executive Officer of HSBC Bank plc, said: "The proposed joint venture will bring together, in HSBC and Norwich Union, two of Britain’s most trusted brands. We believe that combining HSBC’s distribution network and Norwich Union’s underwriting and customer management capabilities will create one of the best general insurance services the market has to offer.
“It would be fair to say that HSBC has historically punched below its weight in insurance but we have shown before that our customers want to stay with us if we offer well serviced, good value products. The relationship with Norwich Union will offer customers a broad product range, great service and another compelling reason to make HSBC their preferred supplier for the full range of financial services.”
Norwich Union and HSBC have had an underwriting relationship for 23 years. At present, HSBC distributes protection, home, travel and car insurance products created by Norwich Union. The planned joint venture will strengthen and deepen this relationship.
Simon Machell, Chief Executive of Norwich Union Insurance, said: "I am excited that we are continuing to grow our relationship with HSBC. A closer association with HSBC will be excellent news for Norwich Union and its staff, and further strengthens our position as the insurance partner of choice for today’s leading brands.
“This joint venture presents an excellent opportunity for us to combine our general insurance expertise with HSBC’s strong brand, to help them maximise the value of their general insurance portfolio. Customers are increasingly turning to trusted brands for their insurance needs and by leveraging the HSBC brand we will create a significant new force in the UK insurance market.”
As well as creating a joint venture, HSBC intends to sell Hamilton Insurance Company Ltd and Hamilton Life Assurance Company Ltd to companies within the Aviva group. The Hamilton companies are currently owned by HFC Bank Limited, a subsidiary of US-based HSBC Finance Corporation.
Hamilton Insurance Company Ltd and Hamilton Life Assurance Company Ltd provide primarily a range of protection insurance products and had gross assets of £180 million and £176 million as at 31 December 2006 respectively.
Clive Bannister, HSBC’s Group Managing Director, Insurance, said: “HSBC has set a target to double the contribution to global profits made by our insurance operations. Creating preferred strategic partnerships with leading general insurers is a key element of that plan. In the UK, an estimated £1 in every £5 of financial services expenditure is spent on insurance. That is why we have chosen Norwich Union Insurance, the leading UK insurer with whom we already have a strong working relationship, to help HSBC satisfy its customers’ insurance needs.”
All of the proposals remain subject to finalisation of definitive documentation as well as regulatory and other consents. The level of capital to be contributed by each party to the joint venture will be agreed and confirmed at a later date.
*Target of top 10 UK general insurer ranking based on projected gross written premium
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.