Aviva to Acquire AIG’s UK Protection Business in £460 Million Deal
British insurance company Aviva has announced its agreement to acquire the UK protection business of American International Group (AIG) in a deal worth £460 million ($563 million). The purchase of AIG Life UK from Corebridge Financial, a subsidiary of AIG listed on the New York Stock Exchange, is set to bolster Aviva’s standing in the market and facilitate “capital-light growth,” according to Aviva CEO Amanda Blanc.
The acquisition will bring 1.3 million individual protection customers and 1.4 million group protection members to Aviva’s portfolio. However, the deal is still awaiting regulatory approvals and is anticipated to conclude in the first half of 2024.
While the transaction presents an opportunity for Aviva to expand its reach, it will also result in a slight reduction in the company’s group solvency II cover ratio. Aviva estimates a decrease of approximately 5 percentage points as a result of the deal.
Aviva’s move to acquire AIG’s UK protection business demonstrates its strategy to strengthen its position in key markets, particularly in the face of economic uncertainty and changing consumer needs. This acquisition aligns with Aviva’s focus on capital-light growth, allowing the company to optimize its resources and enhance its profitability.
The insurance sector has faced numerous challenges in recent years, including increased regulation and changing consumer preferences. Aviva’s acquisition of AIG’s UK protection business not only expands its customer base but also enables Aviva to diversify its offerings and provide a comprehensive suite of insurance products and services to its customers.
Aviva is a prominent presence in the UK insurance industry, listed on the FTSE 100 index. With this acquisition, the company aims to consolidate its position and remain competitive amidst the evolving landscape of the insurance sector.
The deal between Aviva and AIG marks another significant transaction in the insurance industry, following a period of consolidation and strategic realignment. As companies seek to adapt to changing market conditions and customer demands, strategic acquisitions play a pivotal role in ensuring growth and sustainability.
Aviva’s acquisition of AIG’s UK protection business is a testament to the company’s commitment to meeting the needs of its customers while pursuing strategic growth opportunities. With the anticipated completion of the deal in the first half of 2024, Aviva will solidify its position as a leading player in the UK insurance market, poised for future success and sustained profitability.
More detail via Yahoo! Finance here… ( Image via Yahoo! Finance )