Aviva sells Australian life insurance unit to National Australia Bank

Aviva PLC yesterday sold its Australian life insurance and wealth management businesses to National Australia Bank of Melbourne. The unit that the insurer sold is Aviva Australia Holdings Ltd., a life and pensions business and wealth management platform. London-based Aviva reaped some $730.4 million in cash proceeds from the sale, adding $315.9 million to its Insurance Group Directive surplus, a regulatory measure established by London’s Financial Services Authority to calculate surplus capital levels. Of the proceeds, National Australia Bank will shell out $651.5 million in cash upon completion of the deal, plus another $31.6 million in a dividend to Aviva Australia prior to completion, and a forecasted payment of $47.4 million, representing a net asset adjustment that will be paid after the transaction. Upon selling off Aviva Australia, the insurer will concentrate on building its business in China and India, where the company has a strong foothold in the life insurance industry, Simon Machell, chief executive of Aviva’s Singapore-based Asia Pacific unit, said in a statement. Aviva is the second-largest life insurer in China but ranks ninth in the life market in Australia, he said. The sale is expected to close in the third quarter, following regulatory approval.