The insurance giant will sell the 50% share it holds in joint venture Avipop Assicurazioni and wholly-owned subsidiary Avipop Vita.
The joint venture, formed in 2007 by Aviva and Banco BPM, distributes life and general insurance products in Italy.
The value of the sale is yet to be finalised, Aviva said, and will be released “in due course”.
In 2016, the two businesses contributed £200m million (£256.5m, €217.3m) to Aviva’s net assets, and generated about £14m in operating pretax profit.
Behind the scenes
The move comes after Aviva was notified by Banco BPM in June that it did not plan to renew its bancassurance agreement with the insurer.
Earlier this year Banco Popolare merged with Banca Popolare di Milano, creating Banco BPM.
The original agreement between Aviva and Banco Popolare included an option for Aviva to sell its entire shareholding back to the bank in the event of a termination of the distribution agreement.
Despite exiting the partnership with BPM, the chief executive of Aviva’s international insurance business, Maurice Tulloch, insisted the insurer – the seventh largest in Italy – has “momentum” in the country.
“This transaction will realise value for Aviva shareholders and will allow us to invest further in our future growth. We are now in a good position to grow our business further, with our partners and through digital,” Tulloch said.
“Aviva has momentum in Italy and I am confident about our prospects.”
The firm said the deal does not affect its joint ventures with Unicredit and UBI, or its other Italian units, Aviva Life and Aviva Italia.
The company also has distribution partnerships with UBI Banca, Unicredit, Banca Popolare di Bari, a franchise with IFAs and a distribution network of over 500 tied agents.
Aviva’s moves in Italy also form part of the the insurer’s global efforts to simplify and restructure its operations.
This year it has already announced the sale of the majority of its Spanish businesses and the sale of Friends Provident International to RL360°. It also bought a 100% interest in its Vietnamese venture with VietinBank.
Aviva chief executive Mark Wilson has described all these transactions as part of an effort to provide capital that can be invested to grow its core businesses or be used for debt reduction.
The insurer is also in the midst of a £300m share buy-back programme.