There has been some speculation for a little while the Aviva Life would sell it's U.S. life insurance business and stories are starting to ramp up. Aviva, one of Britain's largest life insurers, has been a major player in the indexed insurance market for a little while now. They are a well known indexed and indexed universal life player. So, are they on the bidding block, and who is buying?
We don't know a ton at the moment. Just that Aviva's CFO has reported spent a significant amount of time in the States sorting through what are being called unsolicited offers to the buy the Life Insurer's American block of life business. We also know that Aviva has finalized or is near finalizing the sale of a life units in a lot of other countries.
Aviva itself is remaining pretty low key on the topic. They've not spent a lot of time confirming nor denying the possibility of a sale of their U.S. business. It is facing some steep pressure from shareholders who are upset over its recently struggling share price.
In a word, no. Remember contracts are contracts, no sale of the U.S. business will release a buyer from the obligations Aviva set forth. Also, it's unlikely a less than equally favorable buy would have the funds to purchase Aviva's U.S. life business. There may be a few hiccups along the way, but nothing worse than what we've probably personally seen at companies with no “we just sold” excuse to fall back on.
Again, no. Yes, you'll have to keep track of things when or if a transition takes place. But short of that, there's little an agent or broker can do to assure with 100% certainty that the deal they have with any particular insurance company will always be the deal they have. If you've found some clients for whom Aviva is a great match, there's no reason to approach the use of their products with apprehension due to what is little more than rumors at the moment about the possibility of a sale of the business.
As a good friend of mine once remarked, “we're all for sale every day of the week, best we can do is act in a way that will make our buyer want us.”
No one has named names at the moment with any substantial proof behind them. We do know that the firms involved in offers have been identified at financial and private equity firms. We also know that Manulife (John Hancock here in the States) and Prudential PLC (Jackson National Life) have both made offers for other business units in other countries.
That is not to suggest in anyway shape for form that we believe nor do we have any information that would otherwise cause someone to believe that either of those two companies is interested in a U.S. purchase.
Once we know more about the situation with Aviva, we'll be sure to report here on the Insurance Pro Blog.
Brandon launched the Insurance Pro Blog in July of 2011 as a project to de-mystify the life insurance industry. Brandon was born in Northern New England, and he currently calls VT home. He attended Syracuse University and graduated with a triple major in Economics, Public Administration, and Political Science.
IPB 107: When Interest Rates Go Up, Bonds Go Down. What Does It Mean for my Life Insurance?
A Fixed Indexed Annuity Success Story
10 Things Life Insurance Agents Won’t Say: #4 Variable Annuities are Just Expensive Mutual Funds
2013 Annuity Report