Aviva’s US life and annuities business may be sold following the insurer’s confirmation that it is holding active discussions with external parties regarding the US operation.
In its Q3 interim management statement, Aviva said although any such sale has not been agreed, it would come at a substantial discount to international financial reporting standards (IFRS) book value, but would generate significant economic capital surplus.
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The statement said: "We believe any such sale would be in the best interests of the group and we are hopeful of a satisfactory resolution reasonably soon."
Aviva’s US life and annuities business, Aviva USA, was created from the merger between AmerUs Group and Aviva’s US business in July 2006 for approximately $2.9bn.
As part of its Q3 update, Aviva said the present value of new business premiums (PVNBP) – often referred to as total life and pension sales – for its operation in the US for life, pensions and investment sales was £3bn for the first 9 months of 2012 compared to £2.8bn ($4.5bn) for the same period in 2011.
Aviva said the PVNBP in the UK were flat in the first 9 months of 2013 compared to the previous period in 2011, and stood at £8bn.
It added that trading conditions remain subdued across continental Europe. For example, in France Aviva said sales were lower mainly because of continued unfavourable market conditions.
In the US, the PVNBP for life, pensions and investment sales was £3bn for the first 9 months of 2012 compared to £2.8bn for the same period in 2011.
