The UK firm today said it has agreed to sell its FPIL business two years after it acquired the organisation.

UK-listed insurance and financial services group Aviva is selling its Friends Provident International business, which provides services including wealth management, to RL360 Holding Co., a subsidiary of International Financial Group, for £340 million ($443.6 million).

After a review of FPIL, Aviva said the business, which it bought in 2015, is not “central to the group’s strategy to focus on a small number of markets where it has scale and profitability or a distinct competitive advantage”. 

The sale price is equivalent to 3.2 times FPIL’s 2016 net asset value. 
Offloading the business means Aviva’s Solvency II capital surplus – a key measure of an insurance company’s financial strength – will be increased by about £100 million. The deal will also create an IFRS loss of about £130 million, mainly because of intangible assets held on Aviva’s balance sheet arising from when Aviva bought FPIL. 

In 2016, FPIL made a post-tax loss of £2 million and did not remit any cash to Aviva Group. As a result, a disposal of FPIL is expected to be positive to Aviva’s cash dividend paying capacity, Aviva said in a statement. 

FPIL will continue to serve customers, partners and intermediaries as usual and there is no change to customers’ policies as a result of the announcement, Aviva said.

The transaction is subject to customary regulatory approvals and is expected to complete in early 2018.

“The sale of Friends Provident International Limited is a good outcome for Aviva. 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,” Chris Wei, Executive Chairman, Aviva Asia & FPIL, said.

Late last year senior figures from FPIL and other organisations spoke at a breakfast briefing hosted by this publication to discuss issues around critical illness cover and private client wealth management. See here.