Aviva to sell majority stake in Aviva Singapore to enable merger with Singlife

UK life insurance giant Aviva has agreed to divest a majority stake in Aviva Singapore to a consortium led by Singapore Life (Singlife) for SGD 2.7 billion (£1.6 billion), in a move to help create one of the top insurance companies in Singapore.

The deal will see the merger of Singlife, which is a Singapore-based mobile savings and protection company, and Aviva Singapore. The combined entity, which will be branded initially as Aviva Singlife, is valued at S$3.2 billion.

Aviva Singapore offers Medisave-approved Integrated Shield plans and also supplementary plans for the national ElderShield scheme in Singapore. The company also owns a unit trust platform called Navigator along with two of the largest financial advisory firms in the country in the form of Aviva Financial Advisers (AFA) and Professional Investment Advisory Services (PIAS).

Aviva Singlife’s Singapore licensed insurance business will be led by current Aviva Singapore CEO Nishit Majmudar. Aviva will have a 25% stake in the combined entity, while Singlife’s existing shareholder – Sumitomo Life Insurance will have a 20% stake. Aflac Ventures, Aberdeen Asset Management, IPGL and minorities will have a combined stake of 20% in Aviva Signlife.

The remaining 35% in the enlarged life insurance firm will be held by global alternative asset firm TPG.

According to Singlife, the merger combines the best of its digital capabilities with Aviva Singapore’s product history and advisory services with a goal to raise the standard in how customers can interact with insurers. This will be by combining superior financial products, professional financial advice, and also mobile-first customer engagement, said Singlife.

The deal envisions to bring the mobile-first savings and protection solutions of Singlife to Aviva’s 1.5 million customer base while being able to offer existing customers of the former a considerably deeper product range and advisory capabilities.

Ray Ferguson – Singlife Chairman said: “Singlife was created with the ambition to reshape finance and help unlock the potential of money for everyone.  COVID-19 and changing consumer demands have changed the way people think about financial services, and more than ever before want to engage in a mobile-first way for their ordinary savings and protection needs, and still get the financial advice they need, when they need it.

“By joining forces with Aviva Singapore, we are creating a homegrown regional brand that will go far beyond insurance and deliver on these ambitions by creating innovative financial products with intuitive technology and independent advice.”

Aviva, on the other hand, plans to use the proceeds from the sale to further boost its central liquidity and will be considered as part of its broader capital management and debt reduction goals.

Amanda Blanc – Aviva Group CEO said: “The sale of Aviva Singapore is a significant first step in our new strategy to bring greater focus to Aviva’s portfolio. We have achieved excellent upfront value for shareholders but have also retained an investment in a leading Singapore life business with attractive long-term growth potential. The proceeds from the sale will further strengthen our financial position and enhance our ability to meet our strategic objectives.

“We continue to work at pace and are seeking to take decisive action on our portfolio with the goal of further enhancing long-term value for our shareholders.”

The deal, which is subject to regulatory approval and other customary closing conditions, is likely to be wrapped up by January 2021.