Corebridge Financial, a quoted subsidiary of American International Group, Inc (AIG) has completed the sale of its UK life insurance business, operating as AIG Life Limited (AIG Life UK), to Aviva for £453 million.
The sale was previously announced in September 2023. According to Aviva, the transaction was funded through internal resources and is to deliver strong financial returns with an expected low-teens IRR, including integration and restructuring costs.
For Corebridge, the transaction allows the company to focus on Life & Retirement products and solutions in the United States.
“This transaction is another positive step toward streamlining the Corebridge portfolio to focus on the Life & Retirement products and solutions that are driving positive results in the United States,” said Peter Zaffino, Chairman and CEO of majority shareholder AIG, and Chairman of the Board of Directors of Corebridge.
He added: “We are confident that Aviva will continue to provide individuals and employers with the innovative service and solutions they need to protect themselves and their employees.”
As part of the deal, Aviva will also re-capture the economics of the business that AIG Life UK reinsures internally to the wider AIG Group.
The transaction consideration represents 0.9x AIG Life UK’s Solvency II Own Funds, after adjusting for expected capital synergies.
The estimated impact on the Group’s Solvency II shareholder cover ratio would have been a reduction of c.5 percentage points as of 30th June, 2023, Aviva noted.
Amanda Blanc, Group Chief Executive Officer (CEO) of Aviva, had previously commented: “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. We look forward to welcoming our new customers and colleagues to Aviva.”
