New Delhi, Aug. 5 (Agencies): UK-based financial services major Aviva Plc is reportedly planning to exit its over 10-year old Indian joint venture life insurance company with diversified FMCG player Dabur.
Aviva is reportedly in the process of hiring corporate advisers to find buyers for its 26 per cent stake in the Indian business.
Aviva India in an e-mail said: “We don’t comment on market speculations or rumours as a policy.” E-mails sent to Aviva Plc also did not elicit a response.
Various options are being considered for the exit, including the sale of its stake to Dabur Group if Aviva Plc fails to find a foreign insurer to buy it.
Started in 2002, the life insurance firm has a paid-up capital of Rs 2,004 crore.
Aviva India, a 26:74 joint venture of the UK-based Aviva Plc and Dabur, posted a decline of 11 per cent in total premium collection of Rs 2,140.6 crore in 2012-13 compared with Rs 2,415.8 crore in the previous fiscal.
Last year, Aviva hired former AIA Group CEO Mark Wilson to lead a turnaround in its business, which was hit by slower growth in its main market Europe.
Wilson joined after spiralling costs and poor share price performance triggered an investor revolt in 2012 that forced out then-CEO Andrew Moss. This year, Aviva pulled out of its Malaysian insurance joint venture and exited from Russia.
Like other foreign insurers, Aviva had rushed into India after the government allowed foreign investment in the insurance market in 2000, lured by the low penetration and high savings rate in Asia’s third-largest economy.
Regulatory uncertainty, however, has proved tough for foreign insurers, while insurance in general has failed to take off as expected
Earlier this year, the Netherlands-based ING decided to exit ING Vysya Life Insurance Company by selling its 26 per cent stake to domestic partner Exide Industries.
ING’s exit from the Indian life insurance joint venture is part of the previously announced divestment of ING’s Asian insurance and investment management businesses, the Dutch firm had said in a statement.
Last year, US-based insurer New York Life had exited India by selling a 26 per cent stake in its joint venture company to Japan’s Mitsui Sumitomo Insurance Company.
HSBC recently launched a process to sell its 26 per cent stake in an insurance joint venture with two state-owned banks.