Aviva, the UK insurance, life assurance, pensions and fund management business created by the merger of Commercial Union and Norwich Union, is extending its current life and savings distribution partnership in Italy with Banca Popolare Commercio e Industria (BPCI), to the wider Banca Popolari Unite group (BPU).
This extension will increase Aviva’s access to bank branches in Italy by 380 to 3,500 in total. Bancassurance accounts for some 75% of new business sales in Italy. It further builds upon Aviva’s bancassurance partnerships with Unicredito Italiano, Banca Popolare di Lodi and Banca delle Marche.
BPU was formed in the first half of 2003 following the merger of BPCI with Banca Popolare di Bergamo-Credito Varesino (BPB).
Previously, Aviva and UCI, through the life business CU Vita (owned 51% Aviva, 49% UCI), had formed a 50:50 joint venture, Aviva Vita, with BPCI in 2002. Aviva Vita is controlled by CU Vita. Aviva Vita will be the exclusive provider of life and pensions products and the agreement is designed to run for 10 years, although renewed after 5 years.
As part of the arrangements CU Vita will make a further investment in BPU’s subsidiaries BPCI and Banca Carime with Aviva’s 51% share of this investment being EUR127 million. This will bring Aviva’s total investment in the BPU group to EUR229 million including the EUR102 million investment in BPCI committed to in 2002.
The transaction remains subject to due diligence and regulatory approval and is expected to complete by the end of 2004.
Aviva has a top-ten ranking in the Italian life market through its bancassurance network. In 2003 its new business premiums in Italy were Ј1.5 billion.
Aviva’s other major relationships in Italy date back to 1989 (Credito Italiano / UniCredito Italiano, currently 520 branches), February 1999 (Banca delle Marche, currently 250 branches, July 2000 (the original agreement with Banca Popolare di Lodi signed in 1998 was extended, to a current total of 1,195 branches, 538 through BPL and 657 through the life company Eurovita, which Aviva jointly controls)and December 2002 (BPCI, 241 branches, and Banca Carime, 326 branches).