LONDON Oct 3 British insurer Aviva Plc
has garnered $800 million more than it initially expected from
the sale of its U.S. business, benefiting from an economic
upturn which gained pace while regulatory scrutiny held up the
The disposal is part of a company-wide revamp since a
shareholder rebellion in 2012 which lead to the exit of its then
chief executive following years of spiralling costs and
disappointing share price performance.
Aviva said late on Wednesday it had completed the sale of
its U.S. life and annuities unit Aviva USA Corp to Athene
Holding Ltd, putting its proceeds at $2.6 billion compared with
the $1.8 billion price announced in December.
The additional $800 million "represented estimated earnings
and other improvements in (the) statutory surplus" between June
30, 2012 to Sept. 30, 2013, the company said.
The insurer had in December 2012 announced the deal to sell
its U.S. operations to Athene Holding, a retirement savings
provider funded by an affiliate of Apollo Global Management, a
specialist investor in "alternative" assets such as private
However, regulators were concerned about an emerging trend
of private equity firms entering the annuity business, because
their shorter-term business model than traditional insurers may
not work in the interests of policyholders.
In August, Apollo Global Management agreed to enhanced
safeguards for policyholders with New York's financial regulator
as part of Athene's planned purchase of the New York subsidiary
of Aviva USA.
The new policyholder protections include higher capital
standards, greater disclosure and enhanced regulatory scrutiny.
"The sale of the US business ... simplifies the business,
strengthens the capital position and is a step towards our goal
of creating a business focused on cash flow and growth," Aviva
Chief Executive Mark Wilson said.
Aviva's reorganisation, which promises savings from the sale
or closure of more than a dozen units across its insurance and
asset management operations around the world was first set in
motion by Chairman John McFarlane.
The company brought in Wilson, former boss of Asian rival
AIA Group, at the start of 2013.