Aviva, the UK life, home and car insurer, said that it nearing the sale of its US life and annuities business as it focuses on core businesses.
The company said it is in discussions with external parties about the unit and these talks are being "actively pursued".
The firm said that any sale would come at a "substantial discount" to book value but would generate a significant capital surplus. "We believe any such sale would be in the best interests of the group and we are hopeful of a satisfactory resolution reasonably soon," Aviva said.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The news came as part of the insurer's third-quarter results, in which it said that operating profit trends were broadly in line with the first half.
The net asset value per share improved from 395p to 397p over the three months to September 30th, while the operating capital generated rose from £1.1bn to £1.3bn.
Total worldwide sales in the first nine months of the year totalled £28.95bn, down 5% on sterling terms on the year before, with regions across Europe showing a decline. The US and Singapore were the only two regions that registered growth.
"Trading conditions remain subdued across continental Europe," the company explained, reporting that sales in France, Spain, Italy and Poland saw a significant decline in the nine-month period. Sales in the UK were flat, while Irish sales were down 38%.
"I am pleased to report that we have taken, and are continuing to take, firm and decisive actions to transform Aviva," said Chairman John McFarlane. He said that the key priorities for the firm remain: appointing a "high-quality CEO"; building financial strength and reducing risk and volatility; narrowing focus on core businesses; improving earnings and return on equity performance.
In regards for the CEO search, the company says that the process is now well advanced and in line with the original timetable set out by the board. "Shortlisted candidates are in the process of being interviewed by non-executive directors, and on completion,we will then seek FSA approval for the Board's preferred candidate," McFarlane said.
Meanwhile, as the company focuses on its core businesses and sells off its US life unit, it highlighted eight smaller disposals which are now expected to take place in 2013.
-
Pension schemes pledge to ‘back British’ with £25 billion private markets investmentFor pension savers, the commitment to invest in private assets could mean higher returns
-
Half of UK homeowners will need to tap housing wealth to pay for retirementUnlocking property wealth could inject £21 billion each year into UK economy by 2040, according to new research
