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Aviva Plans MF Foray
05-16-2008
People & Companies in the News Life Insurance firm Aviva India plans to set up an asset management company by venturing into mutual funds, the Economic Times reports. The company is also doubling its sales force for the insurance business and plans to launch new products for the health insurance segment.
Aviva Asia-Pacific ceo Simon Machell said, “India and China have massive geographic potential and will continue to drive our growth in the Asia-Pacific region. In India, we plan to foray in the asset management segment either through a joint venture with a local partner or independently.” According to the existing laws, foreign companies will have to invest a minimum of $5 million if it wants to start an asset management company through a JV. If the overseas company pursues the venture independently, it will have to invest a minimum of $50 million. It takes around 6-12 months to get an asset management license in India.
Asset management is a key unit of the company.
Globally, Aviva Plc has around $326 billion worth of funds as asset under management. Machell said an ideal Indian partner should have a large distribution network. However, he declined to comment if the company is in talks for an Indian partner. Aviva also intends to raise its stake in
Aviva India to 49% whenever the government increases the
FDI limit in the sector to 49% from the present 26%.
The hike in FDI in the sector has been opposed by the Left parties for the past 4 years. Aviva India is a 26:74 JV with the Dabur Group holding the majority stake. Machell added one of the focus areas of the company is to drive its growth in India by augmenting its distribution channel.
The company is expected to increase the strength of its financial planning advisers
to over 70,000 by the end of the financial year from around 30,000 presently. Aviva has been the pioneer of bancassurance in India and has tied up with around 40 banks for distribution of insurance products.
To tap into booming healthcare industry, the company plans to launch new health insurance products soon. Last year, healthcare major Apollo Group had tied up with German company DKV to set up health insurance company. Among others, Max India which is into healthcare apart from a life insurance JV under Max New York Life, is also in talks with global health insurance companies to venture into the medical insurance segment.
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