News eDaily16 Oct 2017

Taiwan:Aviva to quit Taiwanese market

16 Oct 2017

UK-based insurer Aviva is withdrawing from the Taiwanese market after agreeing to dispose of its stake in a joint venture with First Financial Holding.

Aviva will sell its 49% stake in First-Aviva Life Insurance for a token consideration of US$1, the Taiwanese financial holding company said last week.

After the disposal, Aviva will not inject any funds into the joint venture in future rights issue projects and will completely withdraw from the Taiwan market, First Financial said.

The decision was made based on the UK firm's global development strategies, according to First Financial. Aviva has been cutting back its presence in the Asian market in recent years by withdrawing from South Korea, Malaysia and Sri Lanka, while in Europe, it has pulled out of Ireland and Russia, First Financial said.

First-Aviva Life Insurance was established in 2008 to become the first joint life insurance company in Taiwan. It currently has about 60,000 customers, with 90% of them clients of First Commercial Bank, the flagship entity of the group.

First Financial said that despite the shareholding change in First-Aviva Life Insurance, the interests of all of its customers will be fully protected and its long-term commitment to the life insurance unit remains strong.

According to statistics compiled by the Financial Supervisory Commission's Insurance Bureau, First-Aviva Life Insurance posted a loss of NT$57.72 million (US$1.91 million) in the first half of this year, and total premium revenue stood at NT$5.6 billion. The insurer had a risk-based capital ratio of 260% as of the end of June, higher than the minimal requirement of 200%, the data showed

In a statement, Aviva said that following a strategic review of Aviva Taiwan, Aviva concluded that the business is not central to the group’s strategy to focus on markets where it can achieve scale and profitability or have a distinct competitive advantage.

The transaction has a negligible impact on Aviva’s IFRS net assets, Solvency II capital position and IFRS operating profit. The transaction is subject to customary closing conditions, including regulatory approval, and is expected to complete in 2018.

Mr Chris Wei, Executive Chairman of Aviva Asia and Global Chairman of Aviva Digital, said: “We have refocused Aviva’s Asian business on core markets where we have excellent opportunities to grow. With our strong partners and our digital focus, we are intent on disrupting the traditional insurance market.”



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