Britain's largest insurance provider Aviva is set to takeover Direct Line as part of a £3.6 billion deal.

The proposed offer represents total consideration valued at 275p per Direct Line share.

The move comes after Direct Line rejected a lower offer from its UK rival at the end of last month.

In a statement the board of Direct Line said it "remains confident" in its prospects as a standalone company.

It went on to say that the business "continues to have conviction in the capabilities of the newly established leadership team to deliver the announced strategy."

For the financial year ended 31 December 2023, a reported 41 per cent rise in Aviva’s private health business contributed to a nine per cent uptick in its operating profit.

The insurer’s operating profit rose to over £1.5 billion with the company saying that its position as the UK’s "leading" diversified insurer, with major businesses in Canada and Ireland, was “clearly delivering”.

Last year Aviva acquired AIG’s UK protection business for £460 million.

At the time it said the acquisition would build upon its momentum in the protection market where it has delivered “strong organic growth”.

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