Insurer Aviva sells US life insurance unit for $1.8 bn

21st December 2012, Comments 0 comments

British insurer Aviva has agreed to sell its US life insurance business for $1.8 billion (1.4 billion euros) to Bermuda-based Athene Holding as part of a strategic overhaul, it said Friday.

"Aviva plc announces that it has agreed to sell Aviva USA Corporation, its US life and annuities business and related asset management operations, to Athene Holding Ltd, for $1.8 billion," the insurance firm said in a statement.

"Aviva will retain the North American asset management activities of Aviva Investors that are focused on third parties, and Aviva plc assets outside of the USA."

The transaction, worth the equivalent of £1.1 billion, is expected to be completed next year subject to regulatory approvals. Athene Holding is a life insurance holding company that is mainly focused on the retirement market.

Aviva had already revealed in November that it was in talks to sell its US life insurance activities under a large-scale restructuring programme aimed at returning the group to profit.

"The sale of Aviva USA is an important step forward in the delivery of our strategic plan," added Aviva chairman John McFarlane in Friday's statement.

"It considerably strengthens Aviva's financial position, increases group liquidity and improves our economic capital surplus whilst also reducing its volatility."

Aviva -- Britain's second-biggest insurer after Prudential -- said in July that it planned to withdraw from 16 non-core business areas and announced senior management changes following a major strategic review of the embattled group.

The review had been launched to strengthen its capital base and share price after the shock resignation of chief executive Andrew Moss in May amid spreading shareholder revolts over pay for top managers viewed as underperforming.

The London-listed insurer is still in the process of looking for a new chief executive.

In morning deals, Aviva shares rose 0.65 percent to 386.5 pence on the British capital's FTSE 100 index of leading companies, which was 0.92 percent lower at 5,903.49 points.


© 2012 AFP

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