Aviva sells off loss-making Friends Provident subsidiary

Insurance giant Aviva has sold Friends Provident International to International Financial Group for £340 million.

Aviva announced earlier this year that it had seen lower profits from Friends Provident, which serves high net worth clients in the Middle East and Asia, and was placing it under “strategic review”.

The company said it had concluded the business was not central to its strategy of focusing on a smaller number of markets where it already has scale and profitability or a “distinct competitive advantage”.

Friends Provident booked a £2m post-tax loss last year and the disposal comes just two years after the UK insurance firm acquired it as part of its £5.6 billion takeover of Friends Life Group in April 2015.

Aviva said the sale, for a consideration 3.2 times Friends Provident 2016 net asset value, will allow it to “reallocate capital” to more profitable parts of the business.

“The sale of Friends Provident International Limited is a good outcome for Aviva,” Chris Wei, executive chairman of Aviva Asia and Friends Provident, said.

“It allows us to focus on the significant opportunities we have to grow Aviva’s business across Asia through digital and disrupting the traditional insurance industry.”

Friends Provident will continue to serve customers, partners and intermediaries as usual and there is no change to customers’ policies as a result of the sale, Aviva added.

Subject to regulatory approvals being granted, the sale is expected to complete early next year.