India JV boosted Aviva's Asian business

India has made a positive dent in Aviva's Asian balance sheet. The Indian joint venture (JV), a 26:74 partnership between Aviva Plc and the Dabur group, accounted for about 29 per cent of its total Asian business of £172 million in the first half of 2005.

India's total sales amounted to £50 million, up from £27 million in the corresponding period last year.

India's share attributable to Aviva global amounted to £13 million, up from £7 million in the first half of 2004.

"The rate of growth in our Indian operations has been good, and we expect to break even in terms of cash flows over the next three to four years," said Philip G Scott, group executive director, Aviva Plc, in a telephonic conversation with Business Standard from London.

Operating profit from Aviva's life insurance business was up 5 per cent to £857 million in the first half of 2005.

However, over 60 per cent of the profits came from businesses outside the UK.

Though it seems like a long haul before Aviva breaks even, Stuart Purdy, CEO of the Indian JV, said this is in line with expectations. "We are happy with the growth in embedded value at around Rs 300 crore," he added. The JV has seen its sales rise by 86 per cent during the period under review.

Further, Scott said while Aviva looks at the possibility of acquisitions worldwide provided they create value, "I do not see any need for acquisitions for our growth strategy in India."

Pleased with the current strategy in both India and China, Scott said the company would continue offering long-term savings and protection products.

Aviva, today, sells more through its bancassurance tie-ups than through its 5,500-strong agency force.

"Bancassurance accounts for over 65 per cent of total sales," said Purdy.