Aviva buys £460m AIG business in ‘highly attractive’ UK protection market
Insurance heavyweight Aviva has acquired AIG’s UK life insurance business from Corebridge Financial, a subsidiary of American International Group, for a consideration of £460 million. The deal is part of Aviva’s strategy to expand its capital-light businesses, and accelerate growth in the “attractive” UK protection market.
Aviva said the acquisition is being funded through internal resources, and is expected to deliver “strong financial returns with an expected low-teens IRR (including integration and restructuring costs)”. As part of the transaction, Aviva will also re-capture the economics of the business that AIG Life UK reinsures internally to the wider AIG Group.
AIG Life UK provides a full suite of individual and group protection products, with 1.3m individual protection customers and 1.4m group protection members. AIG Life is the life insurance arm of Corebridge Financial in the UK, Channel Islands, Isle of Man and Gibraltar.
The combined protection business will benefit from AIG Life UK’s SME and high net worth propositions as well as relationships with regional and corporate IFAs and other key partners.
The sale is expected to close in the first half of 2024, subject to customary closing conditions including regulatory approvals. The consideration represents 0.9x AIG Life UK’s Solvency II Own Funds, after adjusting for expected capital synergies.
Amanda Blanc (pictured), group chief executive officer of Aviva, said: “This acquisition brings significant strategic and financial benefits to Aviva. It strengthens our prospects in the highly attractive UK protection market and continues our progress in repositioning the Group towards capital-light growth. We look forward to welcoming our new customers and colleagues to Aviva.”
Peter Zaffino, chairman and chief executive officer of majority shareholder AIG, and chairman of the Board of Directors of Corebridge, said: “This transaction is another positive step toward streamlining the Corebridge portfolio to focus on the Life & Retirement products and solutions that are driving positive results in the United States. We are confident that Aviva will continue to provide individuals and employers with the innovative service and solutions they need to protect themselves and their employees.”
Kevin Hogan, president and chief executive officer of Corebridge, added: “Corebridge is focused on leveraging our strong market position and the attractive dynamics of our core U.S. product offerings to deliver enhanced value to stakeholders. Since acquiring the UK Life business in 2014, we have built a well-established provider of life insurance, critical illness and income protection products in the UK. We look forward to working closely with Aviva to ensure a smooth transition for employees, customers and distribution partners.”
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