Insurtech: Aviva Selling Singlife JV Stake to Sumitomo Life for Nearly $1bn

In a strategic move aimed at streamlining its operations and capitalizing on growth opportunities, British insurer Aviva plc has unveiled plans to sell its 25.9% stake in Singapore Life Holdings Pte Ltd, commonly known as Singlife, along with two debt instruments, to Sumitomo Life Insurance Company.

The deal, valued at £0.8 billion (about $1 billion), marks a significant milestone for both companies and highlights the continued attractiveness of the Southeast Asian insurance market.

Sumitomo Life will acquire Aviva’s equity stake for £0.5 billion and the two debt instruments for £0.3 billion, reinforcing its position as a key player in the Singaporean insurance landscape. This transaction comes as Sumitomo Life already holds a 23.2% stake in Singlife, emphasizing its commitment to the region.

Amanda Blanc, Group Chief Executive Officer of Aviva, expressed her optimism about the deal, stating:

This is a good outcome for Aviva. The transaction further simplifies the business, and we are in a very strong position to build on our trading momentum in the UK, Ireland, and Canada.

In 2022, Singlife contributed £17 million to Aviva’s operating profit. The combined value of the equity stake and debt holdings added £729 million to Aviva’s IFRS 17 net asset value as of June 30, 2023.

Additionally, this transaction would have bolstered Aviva’s Solvency II shareholder surplus by £0.4 billion and the Solvency II shareholder ratio by approximately 8 percentage points, while increasing center liquidity by £0.8 billion.

Aviva’s decision to exit the Singlife joint venture aligns with its ongoing efforts to simplify its footprint following the international disposal program concluded in 2021.

It is also consistent with the group’s strategy to prioritize capital-light business units. Aviva had previously divested its majority stake in Aviva Singapore to a consortium led by Singlife in 2020.

The proceeds from this sale will be considered within Aviva’s existing capital management framework, offering flexibility for reinvestment in the business, potential bolt-on M&A activities, and returning capital to shareholders as appropriate.

The transaction is subject to customary closing conditions, including regulatory approvals where necessary, and is expected to conclude in Q4 2023.

This move represents a significant development in the insurance industry, as Sumitomo Life strengthens its presence in Singapore, while Aviva continues to reshape its global portfolio to focus on key strategic areas.

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