Aviva Asia confirmed its shift in investment focus to high growth Asian markets, which it believes have the potential to produce “stellar” returns, in the firm’s financial results for the 12 months of year ended 31 December 2017.
In January 2017; Aviva, Hillhouse Capital and Tencent announced a joint venture to develop digital insurance in Hong Kong, where Hillhouse Capital and Tencent would acquire a combined 60% shareholding in Aviva Life Insurance, also known as Aviva Hong Kong.
The joint venture received regulatory approval and the transaction was completed on 13 February 2018, Aviva confirmed in its results.
Charles Hung has been named chief executive of Aviva Hong Kong, subject to regulatory approval. He has been chief risk officer of Aviva Asia since February 2016. He joined Aviva from HSBC.
Asian results
In August 2017, Aviva Asia launched Aviva Vietnam Life Insurance, known as Aviva Vietnam. This followed its acquisition of VietinBank’s remaining 50% shareholding in their life insurance joint venture VietinBank Aviva Life Insurance.
Chris Wei, executive chairman of Aviva Asia and Friends Provident International, said going forward the group will continue to focus on growth and the improvement of customer experience.
“We are really excited about the launch of Aviva Hong Kong in the first half of 2018.
“This partnership with Tencent and Hillhouse Capital will bring the best frictionless experience for our customers through disruptive technologies, and will be a key player in driving digital revolution in the insurance sector in Hong Kong and Asia,” Wei said.
Aviva announced the sale of Friends Provident International in July 2017 and its entire 49% shareholding in its joint venture in Taiwan in October 2017. The sale of Aviva Taiwan was completed in January 2018.
Value of new business
The report additionally shows the group’s operating profit increased by 17% to £107m ($148m, €119m), buoyed by higher profits in Singapore and China.
Further, it shows a 55% increase in the value of new business (VNB) to £161m, which is attributed to the growth of various markets.
China doubled its VNB through the expansion of its agency and broker channels, Aviva Asia reports. While Singapore’s VNB grew 24%, mainly due to the success of distribution channels including Aviva Financial Advisers and Affinity channel.
Higher sales volume in bancassurance propelled significant growth in Vietnam and Indonesia’s VNB.
“The robust VNB growth of Aviva Vietnam is testament to the success of our multi-channel distribution strategy and our decision to make the business a wholly-owned subsidiary,” Wei said.
£600m for acquisitions
Aviva, of which Aviva Asia is a subsidiary, released its 2017 preliminary results on 8 March.
The results show that Aviva grew its operating earnings per share by 7% and its full year dividend by 18%, the fourth consecutive year of double-digit dividend growth.
This year, Aviva chief executive Mark Wilson said the group expected to deploy £2bn of excess cash. This includes £900m in debt reduction, in excess of £500m of capital returns to shareholders and about £600m for bolt-on acquisitions.
“We continue to invest in our businesses and in particular on priorities such as digital to make our products and services easier for our customers.
“Aviva is now a simpler, stronger group and we are growing. Our strategy is paying dividends,” Wilson said.
