The U.K.’s Aviva plc announced that it has acquired a 51 percent stake in Eagle Insurance Limited, the third-largest insurer in Sri Lanka.
Aviva also noted that its new acquisition has “entered into a bancassurance agreement with National Development Bank Limited (NDB), Sri Lanka’s biggest development bank and Eagle’s other major shareholder.”
Aviva said it had acquired its stake by buying “a majority shareholding in Eagle’s immediate holding company, NDB Finance Lanka (Pvt) Limited from Capital Development & Investment Co Ltd. (CDIC) for a cash consideration of £15 million [$26.6 million]. Aviva and NDB will be the principal shareholders of Eagle.”
Aviva described Eagle as “a composite insurer, with life, general insurance and asset management operations and a 20 percent share of the Sri Lankan life insurance market on a gross written premium basis. In 2004 Eagle had total gross written premiums of £19.6 million [$34.78 million]. The life business accounts for 70 percent of Eagle’s premium income, derived predominantly via direct sales. The general insurance business accounts for 30 percent of premium income, and is in line with Aviva’s strategy of focusing on personal and SME commercial lines business.”
It also noted: “The bancassurance agreement with NDB is for both life and general insurance business and gives access to 25,000 customers through its 28 branches.”
Philip Scott, executive director of Aviva International, commented: “This strengthens our position in the Indian sub-continent and offers good opportunities for growth. 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, with the consequent first-mover advantage. We will also seek to transfer learning from Eagle’s high-performance direct sales model to further boost our direct sales operation in India.”
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