Aviva has shortlisted Prudential and Manulife from the four potential buyers, which were selected from a second stage of bidding for Aviva's insurance business in Malaysia.

The Malaysian underwriting business of Aviva is expected to fetch nearly $500m, as reported by the Reuters.

AIA and Sun Life Financial were short-listed during the first phase of auction, in which 10 firms had submitted their bids.

The UK underwriter is offloading in its 49% stake in an insurance joint venture with Malaysia’s second-biggest lender CIMB Group Holdings, as part of a global withdrawal.

In June 2007, CIMB formed the joint venture with Aviva, but the business failed to perform to its potential, according to industry reports.