2006

Global insurance giant, Aviva plc, has entered the Sri Lanka insurance market by acquiring 51% stake in the highly successful local insurance company, Eagle Insurance Limited for a cash consideration of £15 million (INR 117 crores). Eagle is the third largest insurer in Sri Lanka, and has entered into a bancassurance agreement with NDB Bank, Sri Lanka’s biggest development Bank and Eagle’s other major shareholder.

Philip Scott, executive director, Aviva International, said, “This strengthens our position in the Indian sub-continent. Eagle is a very well-established and successful business. We will bring our bancassurance experience from India to become the pioneer for bancassurance in Sri Lanka. We will also seek to transfer learning from Eagle’s high performance direct sales model to further boost our direct sales operation in India.”

“Aviva has identified Asia as a high growth market. Accordingly, it entered India in 2002, and has rapidly grown into being one of the leading life insurers in the Indian market. This acquisition reconfirms Aviva’s strategic commitment to grow in Asia”, he added.

Speaking on the occasion, Stuart Purdy, Managing Director, Aviva Life Insurance Company India Pvt. Ltd. said, “We are really excited about our entry into the Sri Lankan market. Aviva has grown rapidly in India by combining its global expertise with the local talent. We are now looking to replicate that in Sri Lanka. Eagle Insurance has high quality management and corporate governance and a core value system that is in line with Aviva’s philosophy. We are looking at synergies between our operations overseas and Sri Lanka. Eagle will benefit from Aviva’s expertise in Bancassurance, and Aviva’s modern products, while Aviva will benefit by leveraging Eagle’s world class direct distribution model.”

Nihal Welikala, the MD of NDB Bank highlighted Aviva’s formidable expertise in bancassurance and said, “We are proud to be instrumental in attracting a world class insurance company to Sri Lanka.”

Eagle is a composite insurer, with a 20% share of the Sri Lankan insurance market comprising life, general insurance and asset management business. The life business accounts for 70% of premium income, coming predominantly via direct sales. The general insurance business has scale in its market and is in line with Aviva’s personal and small commercial lines strategy and accounts for 30% of premium income.

In addition, Eagle has entered into a bancassurance agreement with NDB, Sri Lanka’s biggest development bank, for both life and general insurance business, giving access to 25,000 customers through its 28 branches. Eagle will leverage the expertise of Aviva India in building a strong bancassurance business in the country. In addition, successful products of Aviva being sold in India will also be introduced in Sri Lanka. Aviva pioneered Bancassurance and Unit Linked products in India, and it now seeks to replicate the same in Sri Lanka.

About Aviva India Aviva Life Insurance is a joint venture between Dabur and Aviva. Current paid up capital amounts to Rs 459 crores. Dabur are the 74% shareholder and Aviva the 26% shareholder. Aviva plc is the UK’s largest insurance Group and the world’s oldest insurance Group, with a history dating back to 1696. Today, it is the sixth largest insurer worldwide, with 30 million customers and £290 billion assets under management. Prior to nationalization, Aviva was the biggest of the foreign insurers operating in the Indian market.

Founded in 1884, Dabur is one of India’s oldest and largest groups of companies with the Group’s consolidated annual sales in excess of Rs 1,537 crores. A professionally managed company it is the country’s leading producer of traditional healthcare products.

Aviva pioneered the concept of Bancassurance in India, and has leveraged its global expertise in this area successfully in India. Bancassurance has been contributing close to 66% of the total sales of Aviva India. Through its branches and its Bancassurance partner locations, Aviva products are available in 353 towns and cities across India.

Aviva’s products have been designed in a manner to provide customers flexibility, transparency and value for money. We have been among the first companies to introduce Unit Linked products in the market.

Aviva has a unique need based sales approach through the “Financial Health Check” (FHC). The FHC is a free service administered by our FPAs (Financial Planning Advisers) for a need-based analysis of the customer’s long-term savings and insurance needs. Depending on the life stage and earnings of the customer, the Financial Health Check assesses and recommends the right insurance product for them.

Aviva is also keen to reach out to the underprivileged that have not had access to insurance so far. Through its association with BASIX (a micro financial institution) and other NGOs, it has been able to cover lakhs of lives.