British insurer Aviva has agreed to sell its Asia and Middle East-focused Friends Provident International (FPIL) business for £340 million (US$443m) as part of its plan to leave less profitable markets.
The sale of the loss-making business to International Financial Group, which provides offshore investment, savings and protection products, follows a review of the business and string of asset sales in Spain and France.
FPIL employs around 500 staff worldwide and services in the region of 180,000 policies, Aviva said.
"It allows us to focus on the significant opportunities we have to grow Aviva's business across Asia through digital and disrupting the traditional insurance industry." Chris Wei, executive chairman, Aviva Asia and FPIL, said.
The sale will also help Aviva's cash payout capacity, it said, adding that FPIL - acquired through the £5.6 billion takeover of Friends Life in 2015 - made a post-tax loss of £2m last year.
Shares in Aviva were flat in early trading, in line with the broader market.
Isle of Man-based International Finance Group, formed in 2013 to help the management led buyout of RL360 Insurance Company from the Royal London Group, said the deal was part of its plan to become the market leader in offshore savings.
The deal would help it bulk up and give it a combined embedded value - the present value of future profits, plus the value of its assets - of more than £1bn.
The price tag represents a multiple of 3.2 times FPIL's 2016 net asset value and will increase Aviva's Solvency II ratio by around £100m. Aviva's Solvency Ratio - the rainy day cash buffer to any market shock- stood at 189 per cent in 2016, it said it March.
A Solvency Ratio of 100 per cent means that an insurer has set aside enough capital to meet underwriting, investment and operational risks.
As well as the sale of its stake in three Spanish joint ventures for 475 million euros in May, Aviva also sold part of its French business this year and is reviewing its operations in Taiwan. Its main markets include Britain and Canada.
* Reuters