Singapore Life (SingLife) has proved that it is easier for established insurance companies to embrace InsurTech to survive and thrive than it is for a start-up InsurTech to survive on its own. Founded in 2017 and following a couple of rounds of funding, Sumitomo Life Insurance gave SingLife a lifeline in the form of US$90 million in 2019, in exchange for a 25% stake. Other investors included Aberdeen Standard Investments, Aflac Incorporated and IPGL Holdings but that still was not enough.
In September 2020, Sumitomo Life pumped in a further $320 million to support SingLife’s combination with Aviva’s Singapore business to the latter’s benefit. As of December 2019, SingLife had assets of US$363 million and gross premiums of US$104 million. The point of acquiring Aviva Singapore’s business and merging it with SingLife would give the Aviva-SingLife combination the strength of Aviva Singapore’s sales force and SingLife’s digital platform.
On completion, Aviva will receive $2.7 billion in consideration, which comprises $2.0 billion in cash and marketable securities, $250 million in vendor finance notes and 25% equity shareholding in the new group. The transaction represents a multiple of 18.7 times Aviva Singapore’s 2019 IFRS profit after tax and 1.9 times NAV as at June 30, 2020.