Astra Aviva Life was established in 2014 by Aviva and the Indonesian conglomerate Astra International as a 50:50 joint venture
Aviva to sell its 50% stake in Astra Aviva Life to Astra International. (Credit: Raysonho @ Open Grid Scheduler / Grid Engine / Wikimedia Commons)
Aviva has signed a deal to sell out its stake in Indonesian life insurance company Astra Aviva Life to its joint venture partner Astra International for an undisclosed price.
The transaction will mark the exit of the British insurance company from Indonesia.
Astra Aviva Life was established in 2014 by the British insurance group and the Indonesian conglomerate Astra International as a 50:50 joint venture. The Indonesian life insurance company has been catering to individual and corporate customers with a range of protection and investment products.
Astra Aviva Life’s individual customers are said to be coming mainly from bank customers and finance companies. For individual customers, the company offers life insurance, health insurance, and unit-linked life insurance plans.
For its corporate customers and also their employees and families, Astra Life offers life insurance, pension fund, and employee benefit.
Closing of the deal, which will be subject to meeting of certain conditions, is expected to occur in the fourth quarter of this year. Among the conditions are regulatory approval in Indonesia and the closing of Bangkok Bank’s acquisition of Bank Permata, which is the bancassurance partner of Aviva Indonesia.
Bangkok Bank’s shareholders recently approved the Permata Bank deal.
Background of the Astra Aviva Life transaction
In late 2019, Aviva said that it will continue to look for strategic options for its businesses in Indonesia, Hong Kong, and Vietnam, with its respective partners in the countries. The British insurance major at that time was responding to media reports that it was planning to offload its Asian businesses.
After completing a comprehensive review of options for its Singaporean operations, the insurance group came to a conclusion to retain the business in the best interests of its shareholders.
The insurer had also confirmed retaining its joint venture in China with COFCO after taking into consideration of the scale of the market, its relationship with its partner, and the chances for high growth in the region.