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Aviva to buy Direct Line – what it means for insurance customers
Takeover expected to go through in mid-2025 after £3.7bn deal agreed
The insurer Aviva has agreed to acquire its rival Direct Line in a deal worth £3.7bn.
The takeover is expected to be completed in mid-2025, at which point Direct Line Group's brands and services will transfer to Aviva's ownership.
Here, we examine what changes Direct Line customers can expect and explain what the move might mean for people shopping around for car or home insurance.
Which brands will be affected?
Direct Line Group currently operates or partners with a large number of insurance brands, providing car insurance, home insurance, pet insurance, travel insurance and breakdown cover to millions of customers.
Its most well-known 'core' brands are Direct Line, Churchill and Green Flag. These are expected to continue running under Aviva's ownership when the takeover is finalised, along with the existing partnerships Direct Line Group has in place with other companies and brands.
Through its subsidiary UK Insurance (also to be acquired by Aviva), Direct Line Group works with 26 other companies to provide insurance, including Sainsbury's, HSBC and Volkswagen.
However, other brands owned by Direct Line Group but not considered 'core' face a less certain future, which will be reviewed in the next few months. These include Darwin, By Miles and Privilege.
I'm a Direct Line customer. What will the takeover mean for me?
If you have an insurance policy with Direct Line, either directly or via another brand, you'll effectively become an Aviva customer this summer if the takeover proceeds as expected.
In the short term, this shouldn't impact your policy and you won't be required to act.
The two firms claim the merger will result in better outcomes for both groups of customers, with faster claims payments supported by stronger supply chains (the networks of repairers, contractors and suppliers involved in processing claims) and access to wider ranges of products.
Commenting on the merger, Aviva chief executive officer, Dame Amanda Blanc, said, 'Aviva and Direct Line share a deep commitment to excellence in looking after customers, and this will remain a top priority following the acquisition.
'The financial strength and scale of the combined group means customers will benefit from competitive pricing, an enhanced claims experience and even better service.'
How Direct Line Group and Aviva compare
In our annual insurance reviews, Direct Line and Aviva both offered well-performing products, although neither had a perfect record.
While a company's past performance doesn't guarantee how it will fare going forwards, it's still worth checking if there's much of a gap between the two firms in how they've historically handled claims.
Claims and complaint management
We looked at the most recent data from the Financial Conduct Authority (FCA), which shows how frequently insurers accept claims and how often claimants make a complaint about their insurer. The data reflects the full year of 2023.
More often than not, Direct Line and Aviva were both usually in line with or better than the industry average, with a few exceptions, which are highlighted in red in the table below.
When it came to home and travel insurance, Aviva had lower claims acceptance rates than Direct Line.
| Type of insurance | Direct Line claims acceptance rate | Aviva claims acceptance rate | Average claims acceptance rate (all insurers) | Direct Line complaints | Aviva complaints | Average complaints rate (all insurers) |
|---|---|---|---|---|---|---|
| Motor (all) | 95-100% | 95-100% | 99% | 10-15% | 0-5% | 7% |
| Home (combined buildings and contents) | 80-85% | 70-75% | 72% | 10-15% | 10-15% | 10% |
| Home (buildings only) | 75-80% | 60-65% | 63% | 10-15% | 5-10% | 14% |
| Home (contents only) | 80-85% | 60-65% | 77% | 5-10% | 5-10% | 6% |
| Travel (Annual Worldwide) | 85-90% | 80-85% | 79% | 0-5% | 5-10% | 6% |
| Travel (single trip) | 80-85% | 75-80% | 80% | 15-20% | 0-5% | 5% |
Source: FCA General Insurance Value Measures data.
What happens when customers complain?
The two insurers fare similarly when it comes to how often the Financial Ombudsman Service (FOS) upholds complaints made by Direct Line and Aviva customers.
The 'uphold rate' indicates how often the companies are found to have been in the wrong in how they've treated a customer – the lower the rate, the better.
In the first half of 2024, 33% of Direct Line customers whose cases went to the FOS had their complaint upheld, at least in part.
The figure was 35% for Aviva complainants, which was marginally poorer but in line with the industry average of 35%.
- Find out more: how to complain to your insurer.
How will the takeover affect choice for consumers?
There are hundreds of brands selling car and home insurance insurance, many of which you can quickly compare on price using a comparison website.
However, the reality is many of these brands are owned by, or acting as distributors for, a small handful of large insurers.
Aviva and Direct Line are currently among the biggest five car and home insurers. According to market research agency Mintel, the largest five car insurers hold approximately 60% of the market between them, and the largest five home insurers account for more than half of the home insurance market.
In recent years, the numbers of large insurers competing in these spaces has been dwindling, with LV General Insurance being bought by Allianz in 2020 and RSA selling its More Than brand to Admiral in 2023.
Direct Line's sale seems in line with this trend, so it potentially means a further reduction in genuine choice and competition available to consumers.
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How can I find out more about different insurers?
Use the below links to find out how Aviva and Direct Line brands performed in our most recent reviews.
