UK-based insurer Aviva has agreed to sell its entire 80% shareholding in the Italian life insurance joint venture, Aviva Vita, to its partner UBI Banca for €400m.

The move is said to follow the company’s new chief executive Amanda Blanc plans to trim down the insurance group and refocus its portfolio in the UK, Ireland, and Canada markets.

The transaction will enable Aviva to scale up its net asset value by £0.12bn, strengthen Solvency II capital surplus by £0.22bn and increase its Solvency II coverage ratio on a shareholder basis by around 4% points, it said.

Aviva will use the proceeds from the sale to strengthen its central liquidity. It will be considered part of Aviva’s broader capital management and debt reduction objectives.

As part of the transaction, Aviva will repay a subordinated loan of €40m provided by Aviva Italia Holding to Aviva Vita after the deal is concluded.

The gross assets of Aviva Vita were estimated to be £16.32bn as of 30 June 2020.

In addition to Aviva Vita, Aviva has three other operating insurance entities in Italy.

These include Aviva, a 51% owned life insurance joint venture with UniCredit, its fully owned life insurance entity Aviva Life and its fully owned general insurance business, Aviva Italia.

Commenting on the development, Amanda Blanc said: “Our strategy is about focus and delivery. The sale of Aviva Vita is another important step forward as we reshape our portfolio and follows the recent announcement of the majority sale of our Singaporean business.  We will continue to be decisive as we seek to transform Aviva for the benefit of our shareholders.”

In September this year, Aviva agreed to sell a majority stake in Aviva Singapore to a consortium led by Singapore Life (Singlife) for £1.6bn.