Aviva in danger of losing major Asian contract as rivals close in
INSURER Aviva is facing a sale of one of its biggest contracts in Asia, according to market sources.
If the company does not want to lose its bancassurance deal with Singapore’s DBS, which is due to end in 2015 after 14 years, it may be forced by a competitive auction process to pay in excess of $1bn (£642m) to keep it.
However, Mark Wilson, Aviva’s chief executive, has said that although the contract is an important one that Aviva is keen to keep, it will do so “only if it’s on the terms that make sense to us”.
Market insiders have speculated that Aviva’s Asian business could be in trouble, and the loss of this contract would create a huge challenge for the company, which has just announced its intention to buy rival firm Friends Life.
Other companies in the running to take over the DBS deal include AIA, Manulife, Prudential, Axa and Allianz. The new contract to sell life insurance products could cover DBS’s 260 branches across Singapore, Hong Kong, Indonesia, Taiwan, China and India. The deadline for bids is 12 January.