Aviva (AV.L) has confirmed it has sold roadside rescue group RAC to private equity group Carlyle for £1 billion.

Today’s sale is further evidence of Aviva’s plans to sell non-core parts of the business to focus on its insurance and savings brands.

Aviva confirmed that the proceeds from today’s sale and that of the recent Delta Lloyd sale will be kept as cash on the insurer’s balance sheet, bolstering liquidity and allowing Aviva to invest in what it has earmarked ‘priority’ markets.

Andrew Moss, group chief executive of Aviva said the sale of RAC was an important deal for shareholders.

He explained, ‘Together with the recent partial disposal of Delta Lloyd, it demonstrates clear delivery of our strategy and provides the flexibility to deepen our presence in the priority markets where we have strength and scale.’

Based on 31 December 2010 results, this transaction will increase net assets by £0.6 billion.

Despite today’s sale, Aviva will retain the RAC pension scheme, which at 31 December 2010 had a deficit of approximately £160 million.

On completion Aviva will make a one off contribution of £67 million into the scheme. J.P. Morgan Cazenove acted as sole financial adviser on the deal.