Business / Companies

Aviva to increase presence in Asia

By LI XIANG (China Daily) Updated: 2015-07-24 11:16

UK insurance company says Friends Life Group takeover will not affect its expansion strategy

Aviva Plc, the largest insurance group in the United Kingdom, plans to increase its investment in China and other key Asian markets.

The London-based insurer dismissed concerns that its $8.8 billion takeover of Friends Life Group Ltd in the UK would affect its investment strategy in overseas ventures.

"The challenge for us over the next several years will be to take that cash flow (generated by the takeover) and reinvest it in high growth markets," Tom Stoddard, the insurer's chief financial officer, told China Daily in Beijing. "And regionally, it would mean looking for opportunities to invest in our existing business in Asia."

China is one of the fastest-growing markets for the insurance business, and it will continue to be a "good source" of growth for Aviva. Last year, the company doubled the value of new business in China to $51 million, Stoddard said, compared with 2013.

Aviva operates its business in China through Aviva-COFCO, a joint venture with the State-owned agricultural giant COFCO Corp.

Aviva-COFCO posted a total premium income of 3.79 billion yuan ($610 million) last year, according to its financial statement. It is ranked the eighth largest foreign life insurer in China.

While maintaining its traditional business through local brokers and agents, Aviva is also focusing on its digital strategy. The company is keen to tap into China's booming middle class online and grow its brand recognition through its digital strategy. The company is investing about 100 million pounds ($157 million) a year globally on its digital operation, according to Stoddard.

As part of the strategy, Aviva-COFCO has launched an online platform in China that offers health and wealth management advice services for existing and new customers.

China is gradually opening up its highly regulated insurance market to foreign companies. But the market share of foreign life insurers was just 5.6 percent in 2013 compared with 8.9 percent a decade earlier, according to a report by accounting firm Ernst & Young.

"We tend to focus less on market share, and more on the value we create," Stoddard said. "There is a lot of potential for growth, and the task for us and our joint venture is to exploit it and capitalize on it."

He said the group will continue to focus its operation in China through its joint venture and has no imminent plans to acquire other financial assets.

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