Woori Financial Holdings Company, South Korea’s first financial holding company owns a majority stake in the life insurance joint venture company that was formed with Aviva in 2008.
Aviva said its exit from the venture is part of a strategy to focus on markets where it has “scale or a sustainable competitive advantage to maximise return on capital”.
Aviva, which is the UK’s largest insurance company, did not disclose the financial details of the transaction, which is subject to regulatory approvals, but said the deal will have a neutral impact on the its IFRS net assets and will increase economic capital surplus by £0.2bn.
Khor Hock Seng, chief executive of Aviva Asia, said: “Aviva has a strong presence in China and South East Asia, which are key future cash generators for the group. This deal provides further focus to our Asian businesses, which increased value of new business by 65% in 2013.”
The stake sale in Woori Aviva Life Insurance is part of a broader privatization of Woori by the Government of South Korea, a company statement said.
NongHyup Financial Group, the new shareholder in the Woori life venture company, was first launched in 1961 as a cooperative to improve the social and economic status of farmers in South Korea. In March 2012, it was restructured as one of South Korea’s largest financial group with banking, insurance, securities, futures and asset management businesses.
Woori Aviva Life Insurance distributes life insurance products through Woori Financial Holdings’ distribution network of over 1,300 branches across 16 provinces and a sales network of over 1,600 tied agents and 138 agencies along with 51 branches of the insurance venture.
