British multinational insurance company Aviva has announced a £100 million deal to acquire Canada’s Optiom.

Optiom, which operates as a managing general agent (MGA), is a leading provider of vehicle replacement insurance in Canada and offers flexible payment options to customers.

Aviva said that the acquisition will expand its capital-light businesses which make up over half of its portfolio, while also growing its Canadian presence in a profitable segment of the country’s insurance market.

The UK firm already served as an existing capacity provider for Optiom, with Aviva adding that the takeover provides an opportunity for it to increase its access to an attractive line of business while securing a stable stream of distribution income.

Aviva also said that it will lean on Optiom’s distribution relationships in Canada to reach additional customers.

Tracy Garrad, chief executive officer of Aviva Canada, said: “The acquisition strengthens our offering and distribution capabilities in a highly attractive segment of the Canadian insurance market. We know Optiom well through our existing relationship and are excited about what we can do together to better serve our brokers and customers.”

Aviva said it expects the deal to close in the first quarter of 2024.

Under group chief executive Amanda Blanc, Aviva has spent the past few years scaling back its business to focus on its core markets of the UK, Ireland and Canada. In the past three months, Aviva sold off its stake in a Singapore-based joint venture for £800 million while also agreeing a £460 million deal to buy AIG’s UK protection business.

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