Aviva may pull out of its Indian insurance joint venture, valued at more than $500 million, as the British insurer retreats from less-profitable markets where it has struggled to expand, people familiar with the matter said.
Aviva, which aims to cut costs by £400 million by year-end, is in the process of hiring corporate advisors to find buyers for its 26 per cent stake in Aviva Life, its venture with Dabur Group, the sources told Reuters.
The insurer is considering various options, including selling its stake to Dabur Group if it fails to find a foreign buyer, one of the sources said. Dabur Group owns personal care and food products manufacturer Dabur India.
Aviva would be the third foreign insurer to quit India since 2012, stymied by regulations that restrict foreign ownership and fierce political opposition to changing those limits.
Aviva declined to comment. Mohit Burman, a director of Aviva Life who represents Dabur Group, was not immediately available for comment. The sources also declined to be identified due to the confidential nature of the matter.
The insurer had identified China and India as “high priority” and “must win” markets, but the move to sell out of India signals a change in that strategy.
Last year, Aviva hired former AIA Group CEO Mark Wilson to lead a turn around 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.