The UK’s Competition and Markets Authority (CMA) has formally launched a Phase 1 investigation into the proposed acquisition of Direct Line Insurance Group plc by Aviva plc. The inquiry aims to assess whether the merger may lead to a substantial lessening of competition in the UK’s financial services sector, specifically within the insurance market.
Announced today, the CMA’s inquiry marks the opening of an initial review period under the merger provisions of the Enterprise Act 2002. The regulator will examine whether the transaction constitutes a “relevant merger situation” and whether it could harm competitive conditions in any UK markets.
The CMA has issued an invitation to comment, seeking views from interested parties, including consumers, competitors, and other stakeholders. Comments must be submitted by 29 May 2025.
If the CMA identifies competition concerns during this first phase, it may proceed to a more in-depth Phase 2 investigation. The statutory deadline for the Phase 1 decision is 10 July 2025, although the timeline is subject to change as the investigation progresses.
“Mergers between major players in the insurance sector can have wide-reaching implications for pricing, consumer choice, and market innovation,” said a spokesperson for the CMA. “We encourage all interested parties to provide relevant information to support our analysis.”
This high-profile deal would combine two of the UK’s largest motor and home insurance providers. If approved, it could significantly reshape the landscape of the UK’s general insurance market, potentially raising regulatory and competitive questions around market share, consumer switching, and product variety.
The CMA’s decision to open a formal inquiry follows the merger notification submitted by Aviva and Direct Line, which was found to meet the statutory requirements under the Enterprise Act.
The transaction reflects a broader trend of consolidation in the UK insurance sector, as major firms seek to enhance scale, cut costs, and expand customer reach in a highly competitive environment.
Interested parties can submit their views to the CMA via its official website.
