AVIVA CIMB For Sales

Britain's second-largest insurer Aviva plc's sale of its Malaysian life-insurance business could offer a buying opportunity for its competitors looking for a slice of the industry pie here, according to analysts.

The penetration rate for overall life insurance here stands at about 40% as of 2010, translating into 2.8% of gross domestic product, which is low compared with Singapore (6.1%) and Japan (7.5%), he pointed out.

 

Aviva entered the Malaysian market five years ago by forming a joint-venture with the CIMB Group.
 It acquired a 49% equity interest in two of CIMB's subsidiaries, namely Commerce Life Assurance Bhd and Commerce Takaful Bhd, for a cash consideration of about RM500mil.

Reuters reported on Tuesday that Aviva planned to sell the 49% stake in the joint-venture, known as CIMB Aviva in line with its plan to exit non-core markets.

Reuters noted that CIMB Aviva's net profit fell marginally to RM31.8mil last year while net premiums it underwrote dropped about 30% to RM230mil.

Aviva has been in the news recently following its shareholders' complaints about the company's top executives' remuneration packages. This eventually led to the departure of its chief executive officer Andrew Moss earlier this week. Finding a replacement could take some months, according to foreign news reports.