Aviva plc finalizes disposal of stake in Singlife for £937m

In a significant move within the insurance and finance sectors, Aviva plc has successfully completed the disposal of its shareholding in Singapore Life Holdings Pte Ltd (Singlife) along with two debt instruments, accumulating total proceeds of £937 million (SGD 1.6 billion). This transaction marks a pivotal step in Aviva plc’s strategy to streamline its operations and concentrate on its capital-light business models, further reinforcing its presence in the UK, Ireland, and Canada markets.

Originally announced on 13 September 2023, Aviva plc agreed to sell its 25.9% stake in Singlife to Sumitomo Life Insurance Company for a total cash consideration of £0.8 billion (SGD 1.4 billion), which includes £0.5 billion (SGD 0.9 billion) for Aviva’s equity stake and £0.3 billion (SGD 0.5 billion) for two debt instruments. This strategic divestiture by Aviva reflects its ongoing effort to simplify its business footprint following an extensive international disposal program concluded in 2021. The sale is aligned with Aviva’s strategic pivot towards more agile and less capital-intensive operations.

Sumitomo Life, already holding a 23.2% share in Singlife, views this acquisition as a cornerstone of its expansion strategy in Southeast Asia, specifically in Singapore. The transaction not only enhances Sumitomo Life’s stake in Singlife but also signals its confidence in the joint venture’s potential for growth and innovation in the digital and insurance sectors.

The divestment from Singlife is part of Aviva’s broader strategy to refine its global operations, a vision shared and executed by Amanda Blanc, Group Chief Executive Officer of Aviva. Blanc commented on the transaction, stating, “This is a good outcome for Aviva. The transaction further simplifies the business and we are in a very strong position to build on our trading momentum in the UK, Ireland, and Canada.”

In 2022, Singlife’s operations contributed £17 million to Aviva’s operating profit, with the combined carrying value of the equity stake and debt holdings amounting to £729 million to Aviva’s IFRS 17 net asset value as of 30 June 2023. The sale is anticipated to boost Aviva’s Solvency II shareholder surplus by approximately £0.4 billion and improve the Solvency II shareholder ratio by around 8 percentage points, reflecting a significant enhancement of Aviva’s financial robustness and liquidity.

Aviva plc’s disposal of its stake in Singlife to Sumitomo Life Insurance Company for £937 million signifies a strategic realignment of its business model towards more flexible and capital-efficient operations. This move not only streamlines Aviva’s portfolio but also fortifies its commitment to its core markets in the UK, Ireland, and Canada, setting a positive trajectory for future growth and stability.