TORONTO — Royal Bank of Canada is selling RBC General Insurance and moving some of its employees to Aviva Canada.
The bank (TSX:RY) will receive about $582 million from the sale of the home and auto insurance business and RBC estimates it will realize a $200-million after-tax net gain from the deal, which will close sometime between July and September.
Aviva Canada will also provide a full suite of property and casualty insurance to RBC customers, including home and auto, under a 15-year strategic agreement with the bank. Policyholders won't be affected at this time.
About 575 RBC employees will move to Aviva and others supporting the sales process will remain with the bank.
Those that are moving to Aviva are responsible for claims, underwriting, product development, information technology and related functions.
"This partnership is a fantastic addition to Aviva Canada, diversifying our distribution alongside our highly-valued 1,500 independent brokers," Aviva Canada chief executive Greg Somerville said in a joint statement.
The head of RBC Insurance said the deal will allow the bank to focus on and invest in areas with the greatest potential for growth, including life, health and wealth insurance.
"RBC Insurance is one of the fastest growing direct-to-consumer home and auto insurance providers in Canada and this partnership will allow us to maintain our deep client relationships, while offering a full suite of property and casualty insurance products," said Neil Skelding, the president and CEO of RBC Insurance.
The Canadian Press