Taipei, Oct. 13 (CNA) U.K.-based insurer Aviva plc is withdrawing from the Taiwan market after agreeing to dispose of its stake in a joint venture with First Financial Holding Co. () in Taiwan.
Aviva will sell its 49 percent stake in First-Aviva Life Insurance Co. () to First Financial for a token consideration of US$1, the financial holding company said Thursday.
After the disposal, Aviva will not inject any funds into the joint venture in future rights issue projects and will completely withdraw from the Taiwan market, First Financial said.
The decision was made based on the U.K. firm's global development strategies, according to First Financial.
Aviva has been cutting back its presence in the Asian market in recent years by withdrawing from South Korea, Malaysia and Sri Lanka, while in Europe, it has pulled out of Ireland and Russia, First Financial said.
It was the second foreign insurer to withdraw from the Taiwan market since March 2014, when New York Life Insurance sold its assets in Taiwan to Yuanta Financial Holding Co. ().
First-Aviva Life Insurance was established in 2008 to become the first joint life insurance company in Taiwan. It currently has about 60,000 customers, with 90 percent of them clients of First Commercial Bank (), the flagship entity of Financial Holding.
The joint venture signaled First Financial's ambition to expand its reach into the insurance business from banking services. In Taiwan, financial holding companies usually have banking, insurance and security business segments.
First Financial said that despite the shareholding change in First-Aviva Life Insurance, the interests of all of its customers will be fully protected and its long-term commitment to the life insurance unit remains strong.
Commenting on the stake disposal by Aviva, Tsai Li-ling (), deputy director of the Financial Supervisory Commission's Insurance Bureau, dismissed concerns about the local insurance and investment market.
He said the withdrawal by the U.K. firm reflected the company's own development plans in the global market.
Tsai said the bureau has yet to receive any application from Aviva to dispose of its stake in First-Aviva Life Insurance.
According to statistics compiled by the bureau, First-Aviva Life Insurance posted a loss of NT$57.72 million (US$1.91 million) in the first half of this year, and had total premium revenue of NT$5.6 billion.
The insurer had a risk-based capital ratio of 260 percent as of the end of June, higher than the minimal requirement of 200 percent, the data showed.
(By Tsai Yi-chu and Frances Huang)