The joint venture is owned by Aviva and Banco BPM and, together with AV, distributes life and general insurance products in Italy through Banco BPM’s bank branch network. Today’s announcement follows a notification received by Aviva on 29 June 2017 of Banco BPM’s intention to not renew its bancassurance agreement with Aviva. In 2016, the two businesses contributed £0.2bn to Aviva’s IFRS net assets2 and generated approximately £14m IFRS operating profit before tax3.
Aviva formed a bancassurance partnership in protection and general insurance with the former Banco Popolare in 2007. As is customary in bancassurance arrangements, the original agreement between Aviva and Banco Popolare included an option for Aviva to sell its entire shareholding to the bank in the event of a termination of the distribution agreement. The value of the put option will be determined according to terms set out in the shareholders’ agreement and will be announced in due course. Proceeds will be received in cash on completion.
Aviva’s joint ventures in Italy with UBI, UniCredit, as well as business units Aviva Life S.p.A. and Aviva Italia S.p.A. are unaffected.
Aviva Italy offers life and general insurance products to over two million customers. Its product offering includes life, protection, motor, home and personal and commercial lines. At full year 2016 Aviva Italy ranked as the 7th largest insurance group in Italy. It benefits from well-diversified distribution including partnerships with UBI Banca, Unicredit, Banca Popolare di Bari, a strong and growing franchise with IFAs and a distribution network of over 500 multi tied agents.
Maurice Tulloch, CEO Aviva International Insurance, said: “This transaction will realise value for Aviva shareholders and will allow us to invest further in our future growth. Aviva has momentum in Italy and I am confident about our prospects. We are now in a good position to grow our business further, with our partners and through digital.”
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