Aviva looks at Friends Provident sale - reports

Deal expected to fetch around one billion Singapore dollars, according to sources

Aviva looks at Friends Provident sale - reports

Insurance News

By Paul Lucas

Rumours are swirling that insurance giant Aviva is set to make a major sale.

Less than two years on from a £5.6 billion (S$9.8 billion) deal to acquire Friends Life Group Ltd., the company is now expected to offload part of its business in the form of Friends Provident International Ltd., the unit that serves high net worth clients across the Middle East and Asia.

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Friends Provident is based in the Isle of Man and provides both life insurance and investment products across the UAE, Singapore, Hong Kong and other markets. However, when offering its financial report for 2016, Aviva outlined that the unit was under strategic review with little growth among a clientele that largely consists of British expatriates, according to a Market Watch report. Aviva saw its gross operating profit in Asia fall back by 4% year on year during 2016 – that is compared to a 12% increase in profits worldwide.

The report suggests that there have already been several pre-emptive offers for the unit, but that the formal bidding is yet to get under way. The likes of HNA Group and Fosun Group, both giant Chinese conglomerates, are thought to be among those weighing up a potential deal.

Chinese buyers have widely been swirling around overseas insurance companies as they are able to reinvest premiums that are collected without needing to go through the foreign exchange approval process in China. This is seen as a massive advantage in an era in which China is clamping down on capital outflow.

Related stories:
Aviva Asia announces profit dip
Aviva and partners agree to open HK insurer

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