Aviva boss continues to slim business with £355m Italian sale

The new boss of insurance giant Aviva is continuing her plan to slim down the insurance giant, as she announced the sale of one of the company’s Italian arms.

Amanda Blanc’s team said they had found a buyer willing to pay about 400 million euros (£355 million) for their 80% stake in Aviva Vita.

UBI Banca was already Aviva’s partner in the business, and the money it is now ploughing into the acquisition could help Aviva pay off some of its debt and shore up liquidity.

Analysts also speculated that the sale might help avert a widely expected slimming of Aviva’s high dividend.

Alan Devlin, at Shore Capital Markets, said that the market is expecting the dividend to be cut by about 30%, potentially as early as Thursday, when Aviva is set to hold an investor day.

But he added: “If the company can deploy the proceeds from the asset sales then the company can partially or indeed fully protect the dividend.”

The news comes about two months after Aviva said it would sell off its Singapore business for £1.6 billion, and just days before it updates the market on Thursday.

It will provide a chance for Ms Blanc to speak to analysts and investors about her plan for the business, after joining the business in July

After being appointed, Ms Blanc promised to “withdraw capital” in places where Aviva was unable to meet its strategic objectives.

Analyst Michael Hewson from CMC Markets said that Ms Blanc was making good on this promise to focus on Aviva’s core markets, and that further sell-offs could follow.

“Today’s sale looks to be the first indication that its less-profitable businesses are likely to be sold off, with the remaining businesses in Italy as well as the France and Singapore businesses also likely to be in line,” he said.

On Monday Ms Blanc said: “Our strategy is about focus and delivery. The sale of Aviva Vita is another important step forward as we reshape our portfolio and follows the recent announcement of the majority sale of our Singaporean business.

“We will continue to be decisive as we seek to transform Aviva for the benefit of our shareholders.”

Shares rose about 2% on Monday.