British insurer Aviva PLC is selling its Vietnamese business to Canadian insurer ManuLife Financial Corp, it said on Monday, as it pushes ahead with plans to pull out from its non-core markets.
Aviva, under new boss Amanda Blanc, is looking to sell its businesses in continental Europe and Asia, to focus on Britain, Ireland and Canada, after years of share price underperformance in the life and general insurer irked investors.
ManuLife meanwhile said in a separate statement it had also agreed a 16-year bancassurance partnership with VietinBank, as part of the Aviva deal, giving the Canadian insurer a major boost in one of Asia’s rapidly growing markets.
Aviva and ManuLife did not give financial details for the Vietnamese transactions, but the British insurer said the deal would increase its net asset value and Solvency II surplus by around 100 million pounds ($133.67 million).
ManuLife said it expected the partnership with VietinBank to be accretive to diluted core earnings per common share in 2022.
Asia accounts for 40% of the ManuLife core earnings, and the latest deal would help it bolster the regional contribution going ahead, Anil Wadhwani, the region’s president and CEO told Reuters.
“Given our growth ambition…obviously investing in this part of the world and adding to our distribution capabilities is of pivotal importance.”
The so-called bancassurance model – as opposed to the traditional agency model – is also lucrative for commercial banks in Asia because global insurers are willing to pay hefty fees for access to lenders’ branch networks.
Asia has emerged as a battleground for foreign insurers who are attracted by the region’s lower insurance penetration levels and faster growth rates for life insurance premiums than in their home markets.
Aviva, however, sold a majority holding in its Singapore business in September and last week completed the sale of its Hong Kong joint venture as part of its group restructuring. Aviva is also looking to sell business in some European countries.