Aviva PLC, the UK’s second-largest insurance company, confirmed yesterday it is in the process of seeking regulatory approval to pull out of Taiwan to focus on higher-growth markets.
The insurance giant is in talks with the Financial Supervisory Commission (FSC) to sell a 49 percent stake in First Aviva Life Insurance Co (第一英傑華人壽), a joint venture with state-run First Financial Holding Co (第一金控).
The statement came after the British company announced plans earlier this month to cut staff, sell 16 underperforming businesses and it warning 27 others need “significant improvement” as part of a radical overhaul.
“Our intention is to streamline our business by focusing on fewer high-performing markets … As such, we are exiting Taiwan to optimize the group business portfolio and deliver the maximum financial performance,” said Simon Machell, chief executive of higher-growth markets at Aviva.
The planned exit from the Taiwanese market comes two years after Aviva first sought to bow out, but was thwarted by the commission, which suggested the foreign insurer should demonstrate a longer commitment to its customers here, as it had promised.
First Aviva, which incurred huge losses since its establishment in 2008, showed significant improvement in earnings ability this year and may swing to profit later in the year or next year, First Financial chairman Tsai Ching-nian (蔡慶年) told reporters earlier this month.
If Aviva pulls out, First Financial plans to secure a foreign partner that can help it tap into the Chinese market, Tsai said at the time.
Aviva PLC is without a chief executive after Andrew Moss left in May. In a shareholder update, company chairman John McFarlane, who is running the business until a new chief is appointed at the start of next year, said shareholders believe Aviva has weaker capital levels, higher debt levels and more volatile capital than its rivals.
Investors told the group it expanded too much internationally and is overexposed to the eurozone.
Chinatrust Commercial Bank
Separately, Chinatrust Financial Holding Co (中信金控), the nation’s third-largest financial service provider, yesterday approved the resignation of Michael DeNoma as president and chief executive officer at its banking subsidiary Chinatrust Commercial Bank (中國信託商銀).
Beginning on Wednesday, Chinatrust Financial president Daniel Wu (吳一揆) will take over the responsibilities of DeNoma, the company said in a statement.
“Now that I have done what I came to do, it’s time for me to move on to deeper water,” DeNoma said in the statement.
The US banker, 55, joined Chinatrust Financial in June 2009 at the invitation of the group’s founder and chairman, Jeffrey Koo (辜濂松), to help the banking unit transform into a global lender, the company said.
Koo extended gratitude to DeNoma for strengthening the company’s international competitiveness and reasserting its profit leadership among domestic peers.
Chinatrust Financial posted earnings per share of NT$0.93 for the first half of this year, ranking third after Fubon Financial Holding Co's (富邦金控) NT$1.19 and state-run Mega Financial Holdings Co's (兆豐金控) NT$1.13, their stock filings showed.