Aviva prepares to take a £1bn hit on US unit
INSURANCE giant Aviva is expected to announce the sale of its American life assurance business next month, on which it will make a loss of £1bn.
Chief executive Andrew Moss is set to announce the sale at an investor day on May 24 as part of a wider strategic overhaul of the company, according to the Sunday Times.
The business was acquired by Moss’ predecessor for over £2bn in 2006 but is now only expected to be worth half that amount.
Aviva declined to comment on claims that the disposal is part of a restructuring agreement between the chief executive and his incoming chairman, John McFarlane.
Last week Aviva announced that three leading executives, including North American boss Richard Hoskins and Igal Mayer, the head of its European business, would lose their jobs in a boardroom shake-up designed to “simplify” management and boost profits.
Bankers say potential European buyers could be put off bidding because of the incoming Solvency II capital directive. This could force European firm to hold more capital against their American businesses if European regulators decide US capital standards for insurers are less exacting than their own.