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Aviva Examines Sale Of Irish Health Division

Aviva (Other OTC: AIVAF - news) is mulling a sale of its health insurance operations in Ireland (Other OTC: IRLD - news) as it digests the £5.6bn takeover of Friends Life (Other OTC: RSLLF - news) , its smaller rival.

Sky News understands that the FTSE-100 insurance and pensions group has appointed bankers at Macquarie to undertake a strategic review of the Irish healthcare unit, which has approximately 300,000 customers and roughly £300m of gross premiums.

It (Other OTC: ITGL - news) is also the health insurance partner of Ireland's rugby team.

The review is not guaranteed to lead to a sale of the business, which would be likely to fetch tens of millions of pounds, but a disposal is the likeliest outcome, according to people close to the process.

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The company's life and general insurance operations in Ireland are not part of the review and will be retained by Aviva, they added.

News (Other OTC: NWSAL - news) of Aviva's examination of a sale comes months after it completed the takeover of Friends Life, part of a continuing trend of consolidation in the European insurance industry.

Some investors and analysts had expressed scepticism about that deal, questioning whether it would be an expensive distraction for Aviva's management, led by chief executive Mark Wilson.

Announcing third-quarter results last month, however, Mr Wilson insisted that the decision to pursue the purchase had already been vindicated.

"We are maintaining the momentum of Aviva's transformation with a further quarter of improved performance. In life insurance, value of new business was up 25%, the eleventh consecutive quarter of growth.

"The acquisition of Friends Life is everything we expected it to be," he said, hailing £91m of savings and the continued growth of its UK life insurance business.

Aviva declined to comment on Thursday on the future of its Irish health insurance arm.