Allianz Direct, the European direct business of Allianz, has finalised the acquisition of the home insurance business and all operating assets of French online insurer Luko.

The transaction is valued at around €5m ($5.42m), news publication Sifted reported, citing a person privy to the development.

This development marks a significant expansion for Allianz Direct in the French market, adding more than 100 colleagues to its team.

The acquisition is a strategic move by Allianz Direct to broaden its range of offerings and customer base while maintaining the ‘Luko’ brand. This approach aims to leverage the combined strengths of both organisations.

In June last year, Luko faced financial challenges, leading to a bankruptcy filing.

An initial agreement for Luko’s acquisition was made with Admiral Group, a Welsh financial services company, for €14m.

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Luko had a notable presence in the French online home insurance market, with a 25% share of policies sold online in 2022.

The company’s success was partly due to strong word-of-mouth recommendations, with nearly half of its customers purchasing policies based on friends and family endorsements.

However, the deal with Admiral Group was not finalised in November due to unmet transaction conditions.

Allianz had previously expressed interest in stepping in for Admiral Group to acquire Luko’s French home insurance business. This interest has now come to fruition, as confirmed by Allianz Direct CEO Philipp Kroetz.

In a LinkedIn post, Kroetz said: “What a great start to 2024! I am thrilled to announce that Allianz Direct has acquired the French home insurance business of Luko.

“This acquisition not only strengthens our presence in the French direct insurance market and allows us to expand our customer base under the ‘Luko’ brand but will ultimately help us to position ourselves as a leader in the French online insurance market.
“As one team, we are looking to a promising future and are well equipped to offer our customers an unbeatable digital insurance experience.”