Aviva sells €400m Italian life unit as Blanc begins reshaping business

UK insurer Aviva is to sell its Italian life insurance joint venture Aviva Vita to UBI Banca, as new chief executive  Amanda Blanc takes "decisive" action to reshape its business portfolio.

Aviva has agreed to sell its entire 80 percent shareholding in Aviva Vita to its partner UBI in a €400 million all-cash deal that it says represents an "important strategic milestone".

The transaction would increase Aviva’s net asset value as at 30 June 2020 by £0.12 billion, strengthen its Solvency II capital surplus by £0.22 billion and increase its Solvency II coverage ratio on a shareholder basis by approximately 4 percentage points.

In 2019, Aviva Vita’s IFRS profit after tax was £523 million and it did not pay a dividend. The gross assets of the unit were £16.32 billion as at 30 June 2020.

The insurer said proceeds from the sale will be used to further strengthen Aviva’s central liquidity and will be considered as part of Aviva’s broader capital management and debt reduction objectives.

Following the deal, customers of Aviva Vita will continue to engage with the company as usual and there will be no impact to customer policies as a result of this sale. The Transaction is expected to complete in the first half of 2021.

Aviva has three other operating insurance entities in Italy, which the company says it is continuing to evaluate how it manages these businesses to maximise shareholder value.

Blanc, Aviva chief executive, said: "Our strategy is about focus and delivery. The sale of Aviva Vita is another important step forward as we reshape our portfolio and follows the recent announcement of the majority sale of our Singaporean business. We will continue to be decisive as we seek to transform Aviva for the benefit of our shareholders."