Aviva confirms £460m acquisition for AIG’s UK protection business

Aviva has confirmed the acquisition of AIG Life UK from Corebridge Financial, a subsidiary of AIG, in a deal worth £460m.

The transaction is being funded through internal resources, and Aviva suggested it will deliver strong financial returns with expected integration and restructuring costs in the “low-teens”.

AIG Life UK provides a full suite of individual and group protection products, with 1.3 million individual protection customers and 1.4 million group protection members.

The combined protection business with Aviva will benefit from AIG Life UK’s SME and high net worth propositions and will reach more customers through AIG Life UK’s relationships with regional and corporate IFAs, as well as other key partners. The combined businesses will aim to create a more efficient platform from which to serve existing and new customers.

As part of the transaction, Aviva will also recapture the economics of the business that AIG Life UK reinsures internally to the wider AIG Group. The transaction consideration represents 0.9 times AIG Life UK’s Solvency II own funds, after adjusting for expected capital synergies. The estimated impact on the insurer’s Solvency II shareholder cover ratio would have been a reduction of around five percentage points, as at the end of Q2.

Aviva added that the acquisition is “consistent” with its capital management framework, which remains unchanged.

“This acquisition brings significant strategic and financial benefits to Aviva,” group CEO at Aviva, Amanda Blanc, said.

“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.”

The transaction remains subject to customary closing conditions, including regulatory approvals, and Aviva expects the deal to close in the first half of 2024.

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