The American private equity firm Bain Capital has sold Esure to the Belgian insurer Ageas for £1.3 billion in a deal that will create the third-largest motor and home insurer in the UK.
The US firm is selling out after buying the company seven years ago for £1.2 billion in a deal that netted the group’s founder £360 million. Sir Peter Wood, who also set up Direct Line, established Esure as an online insurance seller in 2000 in a joint venture with Halifax before it was merged with Bank of Scotland to form HBOS.
Ageas, the largest insurer in Belgium, is paying cash for Esure, which owns brands including Sheilas’ Wheels and First Alternative.
It said the deal could generate annual cost savings of more than £100 million and would be completed in the second half of the year, if cleared by regulators.
Wood later led a management buyout of the insurer and netted about £200 million when Esure was listed on the London stock market. Wood remained Esure’s largest shareholder after the listing and made a further £360 million when the group was taken private by Bain Capital in 2018.
Esure is now one of the largest providers of motor and homes insurance in the UK, generating premiums of £1 billion from more than 2 million policies in 2024.
Ageas has been growing its business in the UK over four years and now has more than four million customers. The group has focused on selling its insurance products through brokers, concentrating on personal insurance products such as home, car and pet cover. Ageas is seeking to deliver UK revenues of £3.25 billion by 2028.
Hans De Cuyper, group chief executive of Ageas, said the group had grown from being the sixth-largest insurer in the UK to the third-largest in a relatively short amount of time, but that it wanted to be the market leader.
“In every market where we are, we would like to take leading positions. That is key for us,” he said. “We believe that there is a margin to be made when you have a market-leading position and that also allows you to build optimal customer journeys.
“It gives you the size to invest in optimising your value proposition to the customers because you can imagine that with technology, with data and artificial intelligence, a lot can be done.”
Ageas said it was funding the deal through surplus cash and the issuance of debt or equity. The group will also take out a two-year bridging loan from Bank of America and Deutsche Bank to help it to finance the transaction.
David McMillan, chief executive of Esure, said: “This transaction brings together two highly complementary businesses and creates an even stronger platform for continued innovation, growth and excellent delivery for our customers.
“Combining Ageas’s scale, financial strength and excellent broker relationships with Esure’s strong retail brands, market-leading data capabilities and strength on price comparison websites, alongside a shared technology platform, will enhance our combined ability to invest in our customer proposition and open up new opportunities for growth.”
The transaction comes after Aviva bought Direct Line in a £3.7 billion deal announced last year. Aviva is expected to cut about 2,000 jobs across the combined group in an effort to make cost savings of £125 million.
