Aviva Plc, the U.K. insurer that’s overhauling some businesses as part of its chief executive officer’s turnaround plan, is to retain its Chinese joint venture as well as assets in its biggest market, Singapore.
The firm will continue to explore options for some other businesses in Asia, including in Vietnam, Hong Kong and Indonesia, it said in a statement Monday. Aviva’s shares slumped more than 4% in London after the insurer announced its plans for the region’s assets, which combined could be valued up to $4 billion, people familiar with the matter told Bloomberg in August.
Aviva said in August it was reviewing its Asian businesses as part of CEO Maurice Tulloch’s turnaround plan. It conducted a “thorough review” of its options for Singapore, including seeking offers for the business, Monday’s statement said. Its joint venture in China was retained because of its “high growth prospects” and the scale of that country’s market.
“Aviva’s Singapore and China business units delivered double digit operating profit growth in 2018 and are earning attractive returns,” the company said. “Both countries are expected to pay dividends to group center in 2019.”
Firms including Japan’s MS&AD Insurance Group Holdings Inc. and Canada’s Manulife Financial Corp. were vying to buy the company’s assets in Singapore and Vietnam, according to people with knowledge of the matter. While Aviva was seeking about $3 billion from those two assets combined, the valuation could come slightly lower, the people said.
Tulloch, who took over in March, has flagged slashing expenses by 300 million pounds ($389 million) a year and cutting 1,800 jobs by 2022, in an attempt to re-inject growth into the company and lower debt. Aviva’s rivals have fared better by concentrating on life and pensions rather than general insurance.
Asia is one of Aviva’s fastest growing markets, accounting for 5.5% of revenues in 2018 and up from 1.8% in 2013, according to data compiled by Bloomberg. The region’s share of total sales remains small in comparison to the U.K., which accounted for 23.6% of total revenue in 2018.