The acquisition allows Tesco Bank to form an end-to-end insurance business. Credit: Tesco Personal Finance Plc.

Ageas UK has completed divestiture of its 50.1% stake in Tesco Underwriting to Tesco Bank for a total of £123m. The transaction includes a £21m internal loan reimbursement to Ageas.

A non-life joint venture (JV) between Ageas UK and Tesco Bank, Tesco Underwriting offers car and household insurance. The acquisition agreement for Ageas’s stake was signed in October 2020.

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The acquisition allows Tesco Bank to form an end-to-end insurance business to aid Tesco shoppers insure their cars and homes.

Meanwhile, the deal supports Ageas’s strategy focused on its core business and its broker and aggregator distribution channels.

Ageas UK CEO Ant Middle said: “Now is right time for us to hand over to Tesco Bank as we move our focus to building on our core strengths in our heartland of personal lines insurance through the broker and aggregator channels.”

Tesco Underwriting chief executive Steve Kingshott has been also appointed as Tesco Bank chief insurance officer. Additionally, Kingshott joined the bank’s Executive Committee.

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The deal underlines Tesco Bank’s strategy on propositions for Tesco shoppers. It also builds on the offering that insurance customers benefit from under the Tesco family, such being a Clubcard member.

Tesco Bank chief executive Gerry Mallon said: “Today’s announcement underlines our commitment to the one million customers who trust us to protect their homes and cars.

“On their behalf we’ll continue to focus on products that have a strong emphasis on value, helpful benefits and rewarding loyalty.”

From 1 August 2021, Tesco Underwriting will underwrite Tesco Bank’s new and renewing car and home insurance. This will replace the bank’s existing external panel of six insurers.