Aviva set to take £1bn hit on American life arm

Aviva, Britain’s second biggest insurer, is expected to announce the sale of its American life assurance business Aviva USA next month, on which it will make a loss of £1bn.

By The Newsroom

Published 23rd Apr 2012, 07:00 BST

Chief executive Andrew Moss is set to announce the sale at an investor day on May 24 as part of a wider strategic overhaul of the company. The business is likely to fetch about £1bn, about half what Aviva paid for it six years ago, a Sunday newspaper claimed. Aviva declined to comment on the report.

Mr Moss recently told an investor conference that the company was open to offers for its American unit, according to two sources.

Bankers said potential European buyers could be put off bidding because of new European insurance rules known as the so-called Solvency II capital directive, which could force European companies to hold more capital against their American businesses if regulators decide US capital standards are less exacting than their own.