Aviva, a UK-based global financial services company, has reportedly shortlisted three insurance firms to divest 26% stake in its Indian insurance joint venture (JV) Aviva India, as part of a strategy to quit operations in the country.
The shortlisted firms include Max Life Insurance, Birla Sun Life Insurance and HDFC Life Insurance, and due diligence is expected to start soon, media sources reported.
Aviva India was formed by the British firm and Indian FMCG company Dabur in 2002. Aviva is offloading its stake due to difficulty in managing profitability due to intense competition in the Indian market amid rising operational costs.
It is believed that Dabur is also considering offloading its stake in the life insurance JV.
Aviva has hired JPMorgan and Deutsche Bank to manage the share sale process.
Aviva India markets its insurance products and services through IndusInd Bank, RBS and Punjab & Sind Bank as well as over 30 cooperative banks and regional rural lenders.
Managing a distribution network of 134 branches, Aviva India collected INR2.95bn ($48.91m) from new business during the nine months ended 31 December 2013.
In 2013, Dutch financial conglomerate ING decided to exit ING Vysya Life Insurance Company by divesting its 26% shareholding to Exide Industries.
Earlier in 2012, New York Life, the US-based insurer exited India by disposing its 26% stake in its JV company to Japan’s Mitsui Sumitomo Insurance Company.
Image: St. Helen’s, Aviva’s world headquarters in London. Photo: courtesy of Colin.