The sale of its entire stake in the Italian JV is part of Aviva’s efforts to reshape its portfolio

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Aviva to sell out its stake in Aviva Vita for €400m to UBI Banca. (Credit: Raysonho @ Open Grid Scheduler / Grid Engine /

British insurer Aviva has signed a deal to divest its entire 80% stake in Italian life insurance company Aviva Vita to its joint venture (JV) partner UBI Banca for €400m in cash.

In addition to the consideration, a subordinated loan of €40m given by Aviva Italia Holding to Aviva Vita will be fully repaid at the time of closing the deal.

As of 30 June 2020, the gross assets of Aviva Vita were £16.32bn.

Aviva CEO Amanda Blanc 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.”

The deal will also increase the British insurer’s net asset value by £120m, as of 30 June 2020. Besides, the sale will bolster Aviva’s Solvency II capital surplus by £220m and boost its Solvency II coverage ratio on a shareholder basis by nearly four percentage points.

The British insurer plans to use the proceeds to further strengthen its central liquidity. The proceeds will be considered as part of the insurer’s larger capital management and debt reduction goals.

Aviva Vita’s customers will continue to deal with Aviva as usual and customer policies will not be impacted because of the announced transaction.

The deal, which is subject to regulatory approval and other customary closing conditions, is likely to close in the first half of next year.

Aviva also said that it will continue to assess how it manages its three other operating insurance entities in Italy in order to maximise shareholder value.

The entities include Aviva SpA, its life joint venture with UniCredit, the 100% owned life insurance firm Aviva Life SpA, and the 100% owned general insurance entity Aviva Italia.

Earlier this month, Aviva completed the sale of its 50% stake in Indonesian life insurer Astra Aviva Life to a subsidiary of its joint venture partner Astra International.