Aviva plc (“Aviva”) today announces that it has agreed to sell its entire 80% shareholding in the Italian life insurance joint venture, Aviva Vita S.p.A. (“Aviva Vita” or the “Company”), to its partner UBI Banca (the “Transaction”). The Transaction represents another important strategic milestone as Aviva delivers on its commitment to refocus its portfolio.
On completion, Aviva will receive c.€400 million in cash consideration. The Transaction represents a multiple of 8.4x Aviva Vita’s 2019 IFRS profit after tax, 1.0x Solvency II Own Funds at 30 June 2020 and 1.2x net asset value at 30 June 20201. In addition, a subordinated loan of €40 million provided by Aviva Italia Holding S.p.A. to Aviva Vita, will be repaid in full at completion.
The Transaction would increase Aviva’s net asset value as at 30 June 2020 by £0.12 billion, strengthen Aviva’s 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 Aviva Vita were £16.32 billion as at 30 June 2020.
The proceeds 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.
Customers of Aviva Vita will continue to deal with the Company as usual and there is no impact to customer policies as a result of this announcement. The Transaction is subject to customary closing conditions, including regulatory approval, and is expected to complete in the first half of 2021.
Aviva has three other operating insurance entities in Italy:
- Aviva SpA, a 51% owned life insurance joint venture with UniCredit (2019 Solvency II Own Funds of €0.8 billion4)
- Aviva Life SpA, a 100% owned life insurance entity (2019 Solvency II Own Funds of €0.2 billion)
- Aviva Italia SpA, a 100% owned general insurance entity (2019 Solvency II Own Funds of €0.2 billion)
Aviva continues to evaluate how it manages these businesses to maximise shareholder value.
Amanda Blanc, Chief Executive Officer of Aviva, 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.
1. Multiples presented on a 100% basis
2. Translated into GBP at 30 June 2020 spot rate of 1.10
3. Translated into GBP at 2019 average rate of 1.14
4. Figures represent 100% of Aviva SpA
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Notes to editors:
- We are the UK’s leading Insurance, Wealth & Retirement business and we operate in the UK, Ireland and Canada. We also have international investments in Singapore, China and India.
- We help our 18.5 million customers make the most out of life, plan for the future, and have the confidence that if things go wrong we’ll be there to put it right.
- We have been taking care of people for 325 years, in line with our purpose of being ‘with you today, for a better tomorrow’. In 2021, we paid £30.2 billion in claims and benefits to our customers.
- Aviva is a market leader in sustainability. In 2021, we announced our plan to become a Net Zero carbon emissions company by 2040, the first major insurance company in the world to do so. This plan means Net Zero carbon emissions from our investments by 2040; setting out a clear pathway to get there with a cut of 25% in the carbon intensity of our investments by 2025 and of 60% by 2030; and Net Zero carbon emissions from our own operations and supply chain by 2030. Find out more about our climate goals at www.aviva.com/climate-goals and our sustainability ambition and action at www.aviva.com/sustainability
- Aviva is a Living Wage and Living Hours employer and provides market-leading benefits for our people, including flexible working, paid carers leave and equal parental leave. Find out more at https://www.aviva.com/about-us/our-people/
- As at 30 June 2022, total Group assets under management at Aviva Group were £353 billion and our Solvency II shareholder capital surplus at 30 September 2022 was £8.8 billion. Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
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