Aviva to earn another £80m from sale of Singlife stake

Aviva will receive an estimated £80million extra from the deal to offload its stake in Singapore Life Holdings (Singlife).

The insurance giant initially agreed in September to sell its 25.9 per cent holding in Singlife, in addition to two debt instruments, to Japanese company Sumitomo Life for £800million.

It now expects to receive £930million in total proceeds related to the sale after Sumitomo reached a separate arrangement to buy the Singlife stake belonging to asset manager TPG Capital.

Aviva expects to use the additional cash for either reinvestment, investor returns, or mergers and acquisition deals when the deal is finalised, which it expects to happen in the first quarter of next year.

The FTSE 100 firm completed the largest-ever insurance sector merger deal in Singaporean history when it sold a 75 per cent stake in Aviva Singapore for about £1.8billion in 2020 to a consortium led by Singlife.

After Aviva agreed to sell its Singlife holding three months ago, its chief executive, Amanda Blanc, said the transaction represented a ‘good outcome’ and left the group in ‘a very strong position to build on our trading momentum.’

Under Blanc, Aviva has sold off numerous foreign divisions to help reduce its debts, simplify operations, and focus on its UK, Irish and Canadian markets.

The move also followed pressure from Swedish activist investor Cevian Capital to hand more money to shareholders.

Cevian disposed of its entire Aviva stake in May after the London-based business had returned £5billion to investors since 2021.

Upon the disposal, one Cevian partner hailed Blanc for transforming Aviva from a ‘poorly-performing conglomerate into a focused and well-performing insurance company.’

In its most recent trading update, Aviva said it anticipated beating medium-term financial targets and boosting annual operating profits by 5 to 7 per cent despite higher weather-related claims, including from storms Babet and Ciarán in the UK.

Alongside this, the group revealed general insurance premiums rose to £8billion in the first nine months of 2023 following robust performances across all its core operations.

The firm also benefited from higher demand for private health insurance in the UK amid record NHS waiting lists and a surge in corporate customers at its workplace pensions business. 

Aviva shares were 0.35 per cent higher at 432.6p on early Wednesday afternoon but have still declined considerably since the Covid-19 pandemic started.