Aviva plc buys over 50% stake in its Vietnam joint venture

INSURER Aviva plc on Friday said that it has acquired VietinBank's 50 per cent stake in the life insurance joint venture between the two, called VietinBank Aviva Life Insurance Limited (Aviva Vietnam).

The insurer also signed a new distribution agreement with VietinBank to sell life and health insurance products through the latter's network of over 1,100 branches and transaction offices - the second largest in the market.

Following the transaction, which is subject to customary closing conditions including regulatory approvals, Aviva Vietnam will be a wholly owned subsidiary of Aviva - and this helps to simplify the insurer's operating structure in the region.

When asked about the value of the deal, an Aviva Asia spokesman said that "the impact is not material" to the group.

Aviva Vietnam was founded in 2011 and has become a top 10 life insurer by premiums.

Vietnam's insurance market has grown by double digits in terms of life premiums in the past three years and is one of the world's lowest life insurance penetration levels, at less than one per cent of gross domestic product (GDP).

The insurance industry is expected to benefit from the country's projected GDP growth of more than 6 per cent annually over the next three years.