Aviva considers sell-off of UK annuity assets

Aviva is considering selling a chunk of the billions of pounds worth of UK pension assets it owns as it looks to boost the amount of capital it holds on its balance sheet, according to reports.

The FTSE 100 insurance group is exploring whether to raise funds by offloading some of its back book of annuities, according to the Daily Telegraph.

Potential bidders could include industry consolidators such as Pension Corporation or Rothesay Life, part of Goldman Sachs.

Although the plans are believed to be at an early stage, it is understood the company is only prepared to sell some of the annuity assets, rather than the entire portfolio, which is worth several billion pounds, insiders say.

The plan is one of many under consideration but according to analysts would be a cost-efficient way of protecting itself against Europe's sovereign debt crisis and in preparing for Solvency II, new capital rules set to govern the European insurance industry.

Last month, Aviva saw its regulatory surplus capital fall from £4bn at the end of June to £2.7bn. At the time, the company said this was impacted by "market movements", with widening credit spreads accounting for about £700m and a further £400m reduction caused by falling equity markets.