Tryg, the largest insurer in Denmark, has agreed to acquire rival Alka Forsikring in a deal worth €1.1bn.
Rumours of the merger surfaced at the end of last week and Tryg confirmed details on Monday, with the transaction set to complete in the first half of 2018.
Tryg is looking to strengthen its position in the property and casualty (P&C) insurance market and Alka is the eighth biggest insurer in that particular sector, holding a current customer database of around 380,000.
According to Tryg's statement, Alka also has specific expertise in data analytics and fraud detection while carrying a strong, recognisable brand in the country.
"We are very satisfied with the acquisition of Alka, which will strengthen our position in Denmark," said Group CEO Morten Hübbe. "Alka has delivered a combination of strong financial results and high growth, driven by excellent customer satisfaction, and is at the forefront of digital distribution and making it simpler to be a customer.
"We look forward to further developing the already strong cooperation between Alka and the unions, building on Tryg's experience cooperating with unions."
Analysts are suggesting that the acqusition could increase Tryg's market share by 4% from 18% to 22%.