Aviva is to acquire American International Group’s (AIG) UK protection business for £460m.

Aviva will acquire AIG Life UK from Corebridge Financial, a subsidiary of AIG.

It said that AIG Life UK would build upon its “momentum in the protection market”.

The acquisition means existing AIG Life UK customers will benefit from “Aviva’s expertise and financial strength”.

AIG Life UK provides a full suite of individual and group protection products, with 1.3m individual protection customers and 1.4m group protection members.

Aviva said AIG Life UK complements its approach “with a focus on innovative solutions and strong partnership distribution”.

This combination will create “a more efficient platform from which to serve existing and new customers”, Aviva added.

Additionally, the London-based insurer, which had group assets under management of £358bn at the end of June, said it would benefit from AIG Life UK’s “success with small and medium-sized enterprises”, its high net worth propositions and its relationships with regional and corporate IFAs.

This transaction is being funded through internal resources.

Analysts at RBC viewed the deal positively, suggesting it was a sensible use of cash raised on a recent stake sale in Singapore Life, adding that it had not changed their forecast for a £300m share buyback when Aviva announces its full-year results.

Amanda Blanc, Aviva group chief executive, said: “This acquisition brings significant strategic and financial benefits to Aviva.

“It strengthens our prospects in the highly attractive UK protection market and continues our progress in repositioning the group towards capital-light growth. We look forward to welcoming our new customers and colleagues to Aviva.”

Aviva and AIG were contacted by Money Marketing for more details on whether all relevant AIG staff would be moving to Aviva, but both firms declined to comment on this specific issue.

The deal signifies a potential trend given similar transactions earlier this year.

In April, Royal London reached an agreement to acquire Aegon UK’s individual protection line of business, subject to court approval.

As a result of the acquisition, the life insurance, critical illness and income protection policies for over 400,000 customers will transfer to Royal London.

Customers’ policies are expected to transfer to Royal London in 2024, following the completion of a court-approved Part VII transfer.

In the interim period, Aegon UK will reinsure the portfolio to Royal London.

The post Aviva pays £460m for AIG’s UK protection business appeared first on Mortgage Strategy.