SINGAPORE: German insurer Allianz, Nippon Life and MS&AD Insurance are vying with rivals to buy the Singapore and Vietnam businesses of Britain’s Aviva in a deal likely to be worth up to US$2.5 billion, sources said.
Canada’s Sun Life Financial is also among roughly half a dozen suitors competing for the businesses, said the people with knowledge of the matter, who declined to be named as the deal talks are confidential.
The combined deal value for the businesses is estimated to be between US$2 billion and US$2.5 billion, they said, adding that talks were at an early stage and terms could change.
Asia’s fast-growing economies and its relatively low number of insured people make the region a promising market for global insurers – the regional market, worth US$1.7 trillion in premiums, is expected to account for 42 per cent of global premiums by 2029 from about a third currently, a Swiss Re Institute report showed.
But some overseas insurers have struggled to scale up in the face of tough competition from larger regional players, as well as regulatory restrictions on foreign ownership in large markets including China and India.
The divestment of the Aviva units, if completed, would add to strong regional insurance sector M&A momentum in the last couple of years, which has also been aided by local banks looking to exit this capital-intensive business.
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