Aviva shortlists 3 insurers for 26% stake sale in Indian JV

UK-based financial services major Aviva plc, which is planning to exit from its over 10-year old Indian life insurance joint venture with FMCG player Dabur, has shortlisted three insurance players, including Max Life Insurance, to sell its 26% stake.

Three insurance firms - Max Life Insurance, Birla Sun Life Insurance and HDFC Life Insurance - have been shortlisted for the stake sale, sources said.

The due diligence process for the stake sale would start now, sources added.

According to sources, Aviva has appointed J P Morgan and Deutsche Bank to provide consultancy on share sale.

When contacted, Aviva India said these are market speculations and the company do not comment on speculations.

Aviva India with 134 branches collected Rs 295.05 crore from new business in the nine months ended December 2013 while the total premium stood at Rs 1,108.11 crore.

Apart from direct marketing, the insurer sells insurance products through bank partners like IndusInd Bank, RBS and Punjab & Sind Bank. It has more than 30 cooperative banks and regional rural banks as bancassurance partner.

Aviva India posted a decline of 11% in terms of total premium collection at Rs 2,140.6 crore in 2012-13 compared with Rs 2,415.8 crore in the previous fiscal.

Started in 2002, the life insurance firm has a paid up capital of Rs 2,004 crore. Aviva Plc with 26% stake invested Rs 521.27 crore while Dabur share was Rs 1,483.62 crore at the end of December 2013.

Last year, the Netherlands-based ING decided to exit ING Vysya Life Insurance Company by selling its 26% stake to domestic partner Exide Industries.

ING's exit from the Indian life insurance joint venture is part of the previously announced divestment of ING's Asian Insurance and Investment Management businesses, the Dutch banking and insurance company had said in a statement.

In 2012, the US-based insurer New York Life had exited India by selling its 26% stake in its joint venture company to Japan's Mitsui Sumitomo Insurance Company.

Indian insurance sector has 45 private players in life and general insurance business sharing about 30% of the market share in life insurance and 41% of the market share in non-life sector.