Aviva Takes Full Control of French Insurer SEV

Posted on Nov 16, 2010 by Sergio Ulloa (G+)

Aviva has confirmed that it has exercised its option to buy out the remaining 16.3 percent stake in French based company Société d'Epargne Viagère (SEV). On the 10th November, Aviva announced that it had acquired full ownership of the French life insurance company SEV, in which it already held a majority 83.7 percent stake. The news of the purchase comes shortly after the Aviva group reported strong sales growth in the first nine months of 2010. Total sales amounted to €43 billion (US$ 57.4 billion, £35.9 billion), with European sales amounting to €14.7 billion (US$20.9 billion, £13.1 billion). However, sales in the French market sector specifically declined by 3 percent, generating revenue of €650 million (US$915 million:£570 million ). SEV is a French life insurance company and is a joint underwriter of AFER life insurance products in France alongside Aviva Vie, a wholly owned subsidiary of Aviva. AFER of France is the largest savings association in the country, which has half a million members and also provides life-insurance products. There was a year on year increase in sales of 39 percent for Aviva products through AFER, totaling €1.863 billion (US$2.64 billion, £1.55 million) for the first half of 2010 compared to the same period in 2009. The 16.3 percent minority shareholder stake in SEV was purchased for a cash consideration of €121.5 million (US$ 170 million, £101.4 million). Having completed the takeover of SEV, Aviva has strengthened its position in the continental European insurance market. Recent research has indicted that over the next 5 years the European life and pension market is set to deliver total returns of as much as €1.22 trillion (US$1.7 trillion, £1.05 trillion) in pensionable assets - a predicted level of activity which exceeds any other region in the world. When Aviva released its third quarter results for 2010, the group highlighted that it is looking for growth opportunities across Europe. France, being a key member of the European Union, is part of a region where it is forecast that there is going to be annual pension shortfall of €1.9 trillion (US$2.6 trillion, £1.6 trillion); Aviva's full acquisition of SEV will boost their presence in a country with a population exceeding 64 million people. In related news, Aviva France's, Chairman and Director General Jean-Pierre Menanteau announced that he will resign from his post, which he originally took up in the autumn of 2008. Along with other international insurers such as Prudential, AXA and Zurich, Aviva has also expanded its presence in the nascent Asian insurance industry to take full advantage of growing premium returns. However, Aviva still feels that there are substantial returns to be made from the more mature European pension market as this region works towards curbing a pension shortfall. Aviva's recent acquisition means that the London-based insurer is broadening its sales potential in France to take full advantage of the prospects for growth in the European insurance industry. In France Aviva's product range includes car, home, retirement, health, savings and life insurance. Aviva's completion of the deal to fully acquire SEV will augment their presence in an insurance market which is also home to such major players as AXA, Groupama, Generali France, AGF Allianz, Credit Agricole and BNP. In 2008, the French life market was valued at €139.8 billion (US$190 billion, £118 billion), with non-life premiums amounting to €64.4 billion (US$91.4 billion, £53.5 billion). Insurance Company Mentioned: Aviva Europe's fourth largest insurance company, with more than 300 years of experience in the global insurance industry, Aviva is committed to the safety and satisfaction of its customers. They sell a broad range of insurance products including motor and property insurance, protection and health insurance, business insurance, life insurance and pensions.