Aviva announces exit from Italy

Aviva’s transformation to focus on its strongest businesses continues with the sale of its remaining Italian Life and General Insurance businesses (“Aviva Italy”) for €873m in cash.

This values the businesses at €1.2bn including Unicredit Group’s 49% shareholding in Aviva S.p.A.

Key highlights:

• Sale of Aviva’s Life insurance business to CNP Assurances for €543m, and
• Sale of Aviva’s General insurance business to Allianz for €330m
• Collectively the transactions represent a multiple of 0.8x Solvency II own funds and 1.5x IFRS net asset value as at 31 December 2020
• Together with expected proceeds from the previously announced sale of our shareholding in Aviva Vita to UBI Banca, Aviva will realise over €1.3bn of cash from the sale of its insurance businesses in Italy

Amanda Blanc, Chief Executive Officer of Aviva, said:

“Since I announced our new strategy in August last year, we have announced seven divestments that will generate over £5bn of cash proceeds. This rapid progress allows us to focus on transforming and growing our already strong businesses in the UK, Ireland and Canada. The sale of our Italian operations to high quality buyers is a positive outcome for our customers, employees, distributors and shareholders. We promised that we would deliver quickly and we are. Our work to improve Aviva for the benefit of our shareholders continues.”

The estimated financial impact of the transactions on Aviva as at 31 December 2020, is:

• Increase of Solvency II capital surplus by c.£0.2bn and Solvency II cover ratio by c.7 percentage points
• Increase of excess capital above 180% Solvency II cover ratio by c. £0.7bn
• Increase in IFRS net asset value of c.£0.2bn

Customers, partners, financial advisors and agents of Aviva Italy will continue to receive the same high quality service from the businesses and there is no impact to customer policies as a result of this announcement. Employees of Aviva Italy will transfer with the businesses.

Aviva expects to use the increased capital and cash to support its previously communicated capital framework of debt reduction, investment for long-term growth and return of excess capital to shareholders.

The transactions are subject to customary closing conditions, including regulatory and anti-trust approvals, and are expected to complete in the second half of 2021.

Authored by Aviva