Briefing: As Aviva completes DLG takeover, is more personal lines market consolidation on the cards?

Aviva has now officially brought Direct Line Group (DLG) into its fold, with the completion of the £3.7bn takeover being announced this morning (2 July 2025) on the London Stock Exchange.

This announcement was very much expected, given that on the previous day, the Competition and Markets Authority (CMA) had given the green light to the takeover following its review into the deal, which launched in May 2025.

The High Court of Justice also sanctioned the scheme of arrangement pursuant to part 26 of the Companies Act 2006 on 1 July 2025, necessitating the final legal step in the acquisition process. This type of scheme can be used to action the reorganisation of a company or group structure.

With the deal now being complete, it means the insurer has got its wish – expanding in the UK personal lines market.

Explaining its thought process on purchasing DLG in 2024, Aviva said: “The acquisition would expand Aviva’s presence in the attractive UK personal lines market, building on its existing strength and creating a more efficient platform from which to serve existing and new customers.”

The personal lines arena is already competitive given the sheer volume of other options available to consumers, especially in the motor market – a sector which Admiral is leading when it comes to gross written premium (GWP), according to Insurance DataLab.

However, the market intelligence firm also believes that the combined Aviva and DLG business will have almost double the premiums of its closest competitor, with more than £4.5bn in GWP across the motor market once the deal completes.

Other deals

So, Aviva could capture a big chunk of the personal lines market thanks to DLG – but the insurer is not the only firm looking for a big expansion in the personal lines market, with Ageas also making no secret of its plans to expand in this area.

Ageas announced in 2021 that its UK arm would undertake a four-year strategy to hone its craft as a solely personal lines, intermediated business.

And the insurer has made several deals to give its personal lines strategy a boost. For example, in December 2024, the insurer confirmed its 20-year proposed partnership with Saga – including the acquisition of underwriting business Acromas Insurance Company – had been formally agreed by both parties.

Meanwhile, in April 2025, Ageas reached an agreement to acquire motor and home insurance provider Esure for £1.3bn.

Ageas said the deal would help it achieve a balanced and diversified distribution model, spanning direct price comparison websites (PCW), brokers and partnerships.

The insurer also tried to make a swoop for DLG, with it announcing a possible £3.1bn bid in February last year, before improving its offer terms the following month. However, both proposals were rejected by DLG.

Still though, it looks like Aviva and Ageas are on the same page when it comes to growing in the personal lines market. And there is also Markerstudy’s merger with Atlanta, which aims to create a “major new platform” in the personal lines arena.

The deal, which was given the green light in June 2024, will provide a range of insurance products to consumers, including home and motor. Markerstudy aims to transact around £3bn in GWP across these lines.

More consolidation?

One thing that is clear from this activity is that the personal lines market is hotting up, with big players looking at acquisitions to try and gain an advantage in this area.

And I believe other firms could follow suit and go down the inorganic growth route for expansion for two reasons.

Firstly, regulation is tight in the personal lines market. Oxbow Partners noted that following the FCA introducing its general insurance pricing reform in 2022, it is now harder for insurers to grow organically and that cutting prices to attract business “will still get you more market share, but it costs a lot more than it used to”.

Consolidation could help with cost savings, however – Oxbow Partners said that Aviva thinks a further £125m of shared costs can be stripped out over the next three years, while Ageas also expects to generate £130m of annual cost efficiencies once Esure has been fully integrated.

Secondly, these powerhouse type deals have the ability to reshape the UK general insurance landscape throughout 2025 and beyond. This is because enhanced propositions can be offered to consumers due to the increase in firepower linked to scale and I believe we will see some big innovation over the coming years from firms going down the consolidation route.

It will be very interesting to see how the market reacts to the big deals that have been announced. Watch this space.