British insurer Aviva may sell US unit: report
30 Jul 2012
Britain's second-largest insurance group Aviva Plc is preparing to sell its US life division, known as Aviva USA, as the company has received several unsolicited bids for the unit from financial and private equity firms, the Sunday Telegraph reported.
According to the paper, Aviva's chief financial officer Pat Regan has spent a considerable amount of time in Iowa, where the business is based, to prepare the business for sale.
Aviva bought the US business, formerly know as 'AmerUs', for approximately £1.8 billion, in 2006, which is now valued at around £1 billion. The sale will lead to an approximate £800m write-off, as a result of erosion in its value.
The company's chairman John McFarlane took the reins in May after its chief executive Andrew Moss resigned in May following an investor revolt.
As part of the new business strategy announced earlier this month, the insurer has initiated a sale process to dispose of over a quarter of its businesses worldwide to turnaround the company.
McFarlane said the company will focus on fewer businesses where it believes it can produce attractive returns and with a high probability of success, achieve target economic capital levels in line with our industry peers, reduce capital volatility, and bring debt down to a conservative level.