Insurance giant Aviva has agreed to acquire American International Group’s (AIG) UK life insurance unit, AIG Life UK, in a cash deal valued at £460m ($562.83m).

As per the definitive agreement, Aviva will acquire the protection business from AIG subsidiary Corebridge Financial.

AIG Life UK focuses on delivering various individual and group protection offerings. It has a total of 1.3 million and 1.4 million individual protection clients and group protection members, respectively.

This acquisition is part of Aviva’s plan to expand its capital-light businesses, expedite growth in the UK protection market and widen distribution approaches.

Aviva plans to finance the takeover of AIG Life UK using its internal resources.

The deal represents 0.9 times the Solvency II Own Funds of AIG Life UK, the company noted.

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By GlobalData

Aviva group CEO Amanda Blanc 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.”

The merged protection business will leverage AIG Life UK’s existing partnerships with local and corporate independent financial advisors (IFAs) and other partners.

Subject to necessary conditions and approvals, the deal is anticipated to conclude in the first half of 2024.

This acquisition announcement comes after Aviva decided to exit the Singapore Life (Singlife) joint venture by selling a 25.9% stake and two debt instruments to Sumitomo Life Insurance in a deal worth £800m (nearly $1bn).