Britain’s Aviva to sell French company for $ 3.9 billion, continuing core market strategy


Aviva Plc has agreed to sell its French business for 3.2 billion euros ($ 3.9 billion), the largest transaction to date as part of CEO Amanda Blanc’s drive to streamline British insurer .

The unit was sold to French mutual Aema Groupe, recently created by the merger of Aesio and Macif, according to a statement from Aviva on Tuesday. The cash sale is a key transaction among approximately 6 billion euros of divestments pursued by Aviva.

“The sale of Aviva France is a very important step in the implementation of our strategy,” Blanc said in the statement. “The transaction will increase Aviva’s financial strength, remove significant volatility and bring real focus to the group.”

Blanc, who took the helm in July last year, wasted no time in redesigning Aviva, whose share price has not risen in the past five years. It said in August that the insurer would focus on its strongest businesses in the UK, Ireland and Canada, and a wave of deals followed, including the sale of Aviva’s controlling stake in its business to Singapore for around $ 2 billion.

ALSO READ  McLarens acquires Dutch engineering claims firm Vanderwal & Joosten

Aviva shares rose 2.1% at the start of trading in London.

The insurance industry had been under pressure for years even before the pandemic, with record bond yields and rising regulatory costs eating into profits. This has helped bring the deals announced in the industry last year to nearly $ 100 billion, with many insurers, including Aviva, building on markets where they are already firmly established, and dropping less profitable units elsewhere. .

Treat Flurry

The insurer’s French operation accounted for around 20% of the company’s revenue in 2019, according to data compiled by Bloomberg. Yet it only ranks 11th in the French life insurance market, dominated by mutuals and banks, and 12th in general insurance, according to the company’s 2019 annual report.

ALSO READ  Climate models are not designed for use by financial markets, scientists warn

Other recent deals include Aviva’s agreement to sell its life insurance business in Vietnam and the transfer of its stake in an Italian life insurance joint venture with UBI Banca. The company is also in negotiations to sell its Italian life insurance business to Paris-based CNP Assurances, Bloomberg News reported earlier this month, citing people familiar with the talks. Allianz SE is in talks to acquire Aviva’s general insurance unit in the country, the sources said.

ALSO READ  Card Issuers Offer Cheaper Ways To Access Your Line Of Credit - TBEN

In the French deal, Aviva also entered into an indemnity agreement to cover an unusual type of policy issued over two decades ago that allowed French policyholders to switch between funds using week-long prices, and thus make a quick profit. The potential liability on so-called “known price” contracts, as well as the ongoing litigation between Aviva and some of its customers, had raised concerns among some potential buyers.

The indemnification agreement will have a “negligible” impact on Aviva’s solvency position, the company said on Tuesday.

–With the help of Lucca de Paoli.

Photograph: Aviva headquarters in London. Photo credit: Matthew Lloyd / Bloomberg

Copyright 2021 Bloomberg.

Top insurance news, delivered to your inbox every working day

Receive the trusted insurance industry newsletter


Please enter your comment!
Please enter your name here