AXA, a Paris-based insurance and financial services giant, has made a strategic move to bolster its presence in Italy by announcing the acquisition of Prima Assicurazioni. Prima, a direct insurance company, has established itself as a noteworthy player in the retail motor insurance market of Italy since its inception in 2015. With this acquisition, AXA aims to enhance its capabilities in the direct insurance market, leveraging Prima’s established technological infrastructure and skilled workforce.
Previously, Prima has been under the ownership of major shareholders such as Blackstone, Goldman Sachs (NYSE:GS) Alternatives, and Carlyle’s Global Credit platform. These backers significantly contributed to Prima’s development. However, as part of the acquisition deal, Blackstone, Goldman Sachs, and Carlyle will fully exit their investments, while Neurone will maintain its stake. AXA’s decision to acquire Prima follows a strategic path, reflecting the company’s intent to nearly double its Italian motor insurance business and expand in the direct distribution channel.
What Does AXA Gain from Prima?
AXA stands to benefit significantly from Prima’s technological foundation and experienced workforce. With over 1,100 professionals, including more than 400 in software development, IT, and data science, Prima provides a platform that AXA can leverage to enhance its distribution capabilities. The acquisition aligns with AXA’s goal of strengthening its position in the European property and casualty (P&C) market by expanding access to customer segments that are not fully reached by traditional channels.
How Will the Acquisition Impact AXA’s Solvency?
The acquisition will have a notable effect on AXA’s Solvency II ratio, which is anticipated to decrease by 6 percentage points. AXA has aimed for the transaction to be financially viable, citing a price-to-earnings ratio of about 11 times the cost, including the takeover capital from external insurers. The deal, scheduled to close by the end of 2025, is structured in such a way to accommodate further acquisition of Prima’s remaining stake based on its earnings performance.
In this strategic move, Patrick Cohen, CEO of AXA European Markets & Health, commented:
“We are excited to announce the acquisition of Prima, which will not only significantly enhance our position in the Italian P&C market but also bring capabilities to strengthen our direct business in European Markets.”
From Prima’s perspective, George Ottathycal, CEO of Prima Assicurazioni, expressed:
“This is an important milestone which marks a significant recognition of the work carried out so far by the entire Prima Assicurazioni team and of the quality of what Prima has built over its first 10 years of life.”
AXA, a global insurance entity, provides solutions across multiple segments beyond just motor insurance. Its services include property and casualty insurance, life and savings, asset management, and more. This diversified portfolio and partnerships allow AXA to offer a broad spectrum of services, catering to both individual and corporate clients across different geographies.
The integration of Prima into AXA marks a noteworthy milestone in the direct insurance space. With almost 5 million customers, Prima’s market presence will be pivotal in AXA’s expansion strategy. The transaction underscores both companies’ focus on technology and customer service excellence. For a reader keen on the insurance industry, such acquisitions illustrate AXA’s commitment to growth and the reshaping of market dynamics through strategic alignments.
