Southeast Insurance, together with GSM Advance, pioneers the new world of insurance by introducing Thailand’s first on-mobile insurance application; “Double PA Coverage”. The ‘Double PA Coverage’ ensures unexpected accidents via mobile phone offering the individual insurance policy for a 1-year worldwide coverage amount starting from 100,000 Baht and addition up to 200,000 Baht varied in duration in network. Exclusively for GSM Advance customers, press *198 and call out. The first 100,000 customers apply at no cost today until January 31, 2010.
Mr. Chotiphat Bijananda, Chairman of Executive Board of The Southeast Insurance, stated that “Southeast Group’s has recently Reengineered and Rebranded the Insurance and Financial Business Group consisting of Southeast Insurance, Southeast Life Insurance, and Southeast Capital for a wider recognition, refreshment of our image, and the modernization of personality. Part of them is also to secure the awareness among new generation. Along with this direction, Southeast Insurance develops new service features that match the new generation’s lifestyle and to deliver complete solutions to satisfy core demand of customers in both private and business life. Services based on wireless technology can become ‘the’ one”.
“With the concept care and warmth can be catered through air” and to capitalize on wireless technology, the Group, therefore, cooperates with the GSM Advance, to form this innovative business solution. This ‘Double PA Coverage’, which will start with privileges to GSM Advance customers, comprises of double individual insurance “PA 99” from Southeast Insurance, offering personal accident insurance of 100,000 Baht coverage for a one year period. Customers staying longer in the network receive more coverage up to 200,000 Baht” said Chotiphat
Mr. Somchai Lertsutiwong, Executive Vice President - Marketing of AIS, talked about the cooperation “Wireless technology bridges every gap with no limitations. So far, AIS has placed importance to partnerships in a broad array of industries in order to create innovative services. The cooperation with Southeast Insurance marks the unprecedented situation where wireless technology is able to deliver care and warmth to GSM Advance customers. Simply and always, individual insurance from Southeast can be applied via mobile phones for an immediate protection and privileges. In terms of AIS, not only do we render service beneficial to customers’ daily life, but also provide added value for AIS customers. Besides we believe that the service will encourage the development of new services through the synergy leveraging on strengths between different industries and, as a result, expand the market as well as fueling the growth of aggregate economy.”
The service “Double PA Coverage” from Southeast Insurance and GSM Advance is a co-service that allows GSM Advance customers to apply for the individual insurance “PA 99” from Southeast Insurance simply on mobile phone by pressing *198 and calling (free of charge). Customers receive a worldwide protection with the immediate 1-year coverage amount starting at Baht 100,000 after confirming the application. No cost for the first 100,000 applicants (limited to 1,000 applicants per day), from today to January 31, 2010. Even more special for GSM Advance customers, receive additional coverage amount every 3 month in the network up to Baht 200,000 coverage amount. GSM Advance customers who miss this opportunity may purchase the protection “PA 99” for a Baht 99 premium per year and earn all privileges of “Double PA Coverage.” AIS facilitates the payment for GSM Advance customers by consolidating application fees in next Statement after the application.
Chotiphat and Somchai together added “We are earnestly convinced that the service “Double PA Coverage” perfectly combine strengths of both parties. The easy and speedy insurance scheme coupled with sincerity from Southeast Insurance and best quality network from AIS will bring warmth and security assurance to GSM Advance customers hereafter.”
Saturday, November 21, 2009
Friday, November 13, 2009
Industry hits 18% growth
Thai insurance businesses performed strongly in the first three quarters of this year, generating 187.52 billion baht in premium income, up 18% over the same period last year.
The Thai Life Assurance Association attributed the gains to new product designs and effective sales of bancassurance via branches of commercial banks.
Bussara Ungphakorn, the association's director, said the industry has also benefited from government encouragement of long-term savings through life insurance by doubling the premium amounts that can be deducted from personal taxable income to 100,000 baht a year.
The growth is also in line with economic improvement, she said.
"We expect the life business will continue to grow at the same pace, pushing up premium income for the entire year to 254.74 billion baht, up 15% year-onyear," Mrs Bussara said.
Out of total premiums received in the first nine months, new business premiums were up 29% to 64.2 billion baht,and renewal premiums rose 13% to 123.32 billion.
Of the new business premiums, firstyear premiums rose 26% to 41.3 billion while single premiums rose 36% to 22.9 billion baht.
American International Assurance (AIA) led the industry with 61 billion baht in premium income for a 33% market share. It was followed by Thai Life Insurance with 26.22 billion and a 14%share, Muang Thai Life Assurance with 15.89 billion (8%), Siam Commercial New York Life with 14.68 billion (7.83%), and Bangkok Life Assurance with 14.52 billion and a 7.74% share.
Mrs Bussara said insurers planned more new products to promote the industry in the near future including pension policies to serve the growing ageing population.
An AIA executive said that AIA Universal Life, which offers high flexibility and guaranteed minimum returns, had posted impressive results since their launch early this year.
From March to September this year,the company signed up more than 40,000 new policies or 1.1 billion baht in firstyear premiums, said Sataya Tepbunterng,general manager for agency distribution of AIA Thailand.
The insurer is the only company in Thailand to offer universal life to date.
The Thai Life Assurance Association attributed the gains to new product designs and effective sales of bancassurance via branches of commercial banks.
Bussara Ungphakorn, the association's director, said the industry has also benefited from government encouragement of long-term savings through life insurance by doubling the premium amounts that can be deducted from personal taxable income to 100,000 baht a year.
The growth is also in line with economic improvement, she said.
"We expect the life business will continue to grow at the same pace, pushing up premium income for the entire year to 254.74 billion baht, up 15% year-onyear," Mrs Bussara said.
Out of total premiums received in the first nine months, new business premiums were up 29% to 64.2 billion baht,and renewal premiums rose 13% to 123.32 billion.
Of the new business premiums, firstyear premiums rose 26% to 41.3 billion while single premiums rose 36% to 22.9 billion baht.
American International Assurance (AIA) led the industry with 61 billion baht in premium income for a 33% market share. It was followed by Thai Life Insurance with 26.22 billion and a 14%share, Muang Thai Life Assurance with 15.89 billion (8%), Siam Commercial New York Life with 14.68 billion (7.83%), and Bangkok Life Assurance with 14.52 billion and a 7.74% share.
Mrs Bussara said insurers planned more new products to promote the industry in the near future including pension policies to serve the growing ageing population.
An AIA executive said that AIA Universal Life, which offers high flexibility and guaranteed minimum returns, had posted impressive results since their launch early this year.
From March to September this year,the company signed up more than 40,000 new policies or 1.1 billion baht in firstyear premiums, said Sataya Tepbunterng,general manager for agency distribution of AIA Thailand.
The insurer is the only company in Thailand to offer universal life to date.
AXA ASIA PACIFIC REJECTS $10-BILLION AMP, AXA BID
Axa Asia Pacific Holdings, the Australian unit of France's biggest insurer, rejected an unsolicited US$10-billion (Bt333.3-billion) bid from parent Axa SA and wealth manager AMP in Asia's largest takeover offer this year.
Sydney-based AMP bid 5.34 Australian dolalrs in cash and stock for each share of Melbourne-based Axa Asia Pacific, 24-per-cent higher than Friday's closing price. Under the proposal, Paris-based Axa SA would sell its 54-per-cent stake in Axa Asia Pacific to AMP, and buy back the Asian units for A$7.7 billion (Bt237.6 billion).
Axa Asia Pacific shares soared as much as 35 per cent, indicating investors expect a higher bid. The offer marks the second attempt by Axa SA to buy the unit in the past five years to tap rising wealth in a region recovering from the global financial crisis faster than the US and Europe.
"This offer is not anywhere near acceptable," said Rob Patterson, at Argo Investments, in Adelaide. "Including Axa Asia Pacific and AMP shares. It looks pretty low ball. The Asia business of Axa Asia Pacific is a growth option."
Shares of Axa Asia Pacific jumped 33 per cent to A$5.70 at the close in Sydney trading after chairman Rick Allert said on a conference call with reporters that he was not prepared to accept an offer he considers too low.
"If they come back, then we'll look at whather they come back with," Allert said.
Axa SA said yesterday it will raise 2 billion euro (Bt99.7 billion) in a rights offer to finance acquisitions. Investors will be offered one new share for every 12 existing shares and the capital raising will be priced at 11.90 euro a share, Axa said in a statement.
Axa Asia Pacific is responsible for Axa Group's life insurance and wealth management businesses in the region. It has operations in Hong Kong, China, Singapore, Indonesia, Philippines, Thailand, India, Malaysia, Australia and New Zealand, according to the company's website. It employs more than 2,300 people in Australia and New Zealand, and around 1,900 in Asia.
The combined riches of milion-aires in China, whose economy grew 9 per cent last year even as the US and Europe slipped into recession, over took that of the UK to rank fourth, according to a report by Capgemini and Merrill Lynch Wealth Management in October. The wealth of Asia-Pacific millionaires will incease 8.8 per cent annually until 2018, compared with a global average of 7.1 per cent, the firms forecast.
Sydney-based AMP bid 5.34 Australian dolalrs in cash and stock for each share of Melbourne-based Axa Asia Pacific, 24-per-cent higher than Friday's closing price. Under the proposal, Paris-based Axa SA would sell its 54-per-cent stake in Axa Asia Pacific to AMP, and buy back the Asian units for A$7.7 billion (Bt237.6 billion).
Axa Asia Pacific shares soared as much as 35 per cent, indicating investors expect a higher bid. The offer marks the second attempt by Axa SA to buy the unit in the past five years to tap rising wealth in a region recovering from the global financial crisis faster than the US and Europe.
"This offer is not anywhere near acceptable," said Rob Patterson, at Argo Investments, in Adelaide. "Including Axa Asia Pacific and AMP shares. It looks pretty low ball. The Asia business of Axa Asia Pacific is a growth option."
Shares of Axa Asia Pacific jumped 33 per cent to A$5.70 at the close in Sydney trading after chairman Rick Allert said on a conference call with reporters that he was not prepared to accept an offer he considers too low.
"If they come back, then we'll look at whather they come back with," Allert said.
Axa SA said yesterday it will raise 2 billion euro (Bt99.7 billion) in a rights offer to finance acquisitions. Investors will be offered one new share for every 12 existing shares and the capital raising will be priced at 11.90 euro a share, Axa said in a statement.
Axa Asia Pacific is responsible for Axa Group's life insurance and wealth management businesses in the region. It has operations in Hong Kong, China, Singapore, Indonesia, Philippines, Thailand, India, Malaysia, Australia and New Zealand, according to the company's website. It employs more than 2,300 people in Australia and New Zealand, and around 1,900 in Asia.
The combined riches of milion-aires in China, whose economy grew 9 per cent last year even as the US and Europe slipped into recession, over took that of the UK to rank fourth, according to a report by Capgemini and Merrill Lynch Wealth Management in October. The wealth of Asia-Pacific millionaires will incease 8.8 per cent annually until 2018, compared with a global average of 7.1 per cent, the firms forecast.
Allianz swings to profit
Allianz SE unveiled forecast-beating quarterly earnings yesterday, boosted by life insurance and asset management, though it warned economic weakness was still hitting demand in the broader insurance market.
"Property-casualty as well as life insurance face markedly weaker demand due to the economic downturn with rising business insolvencies and rising unemployment," Europe's biggest insurer said yesterday in its third-quarter report.
"Prices are moving upward only slowly - if at all - and only in specific areas of business," it added.
Allianz said it was well-positioned to take advantage of improvements in the economy, after its life and health insurance and asset management businesses helped it post a 23% rise in operating profit in the third quarter.
Allianz rival AXA SA, Europe's second biggest insurer, on Oct 29 posted slightly weaker-than-expected quarterly sales,but said the outlook for its business had improved.
"Allianz more than fulfilled the forecasts, both bottom line and at the operating level," said UniCredit analyst Andreas Weese in a client note.
"While property-casualty insurance was largely in line with expectations,life and health insurance and financial services exceeded the forecasts," Weese said.
Allianz's shares were trading up 3.8%at 82.35 a share early yesterday, outpacing a 1.86% gain in the DJ Stoxx European insurance index.
The company's main business of property and casualty insurance posted an 18% decline in operating profit from the year-earlier quarter.
"While pricing is on an upward trend,our volumes remain challenged due to weaker demand, the effects of our portfolio cleaning measures and selective underwriting," Allianz said of the segment, which normally accounts for some 60% of group operating profit but in the third quarter contributed little more than half.
Allianz reported quarterly operating profit of 1.929 billion ($2.9 billion), above the average forecast of 1.804 billion in a Reuters poll of 18 analysts.
It also swung to a quarterly net profit of 1.3 billion, above the 1.2 billion expected in the poll, from a 2 billion loss in the third quarter of 2008, when it sold its unprofitable Dresdner Bank unit to Commerzbank.
Allianz's shares have risen by 5.8%since the start of the year, lagging a gain of nearly 10% in the DJ Stoxx European insurance index.
Data from Thomson Reuters StarMine,which weights analysts' forecasts according to their track record, Allianz trades at 7.7 times 12-month forward earnings, making it cheaper than French rival AXA, which trades at a multiple of 8.4.
"Property-casualty as well as life insurance face markedly weaker demand due to the economic downturn with rising business insolvencies and rising unemployment," Europe's biggest insurer said yesterday in its third-quarter report.
"Prices are moving upward only slowly - if at all - and only in specific areas of business," it added.
Allianz said it was well-positioned to take advantage of improvements in the economy, after its life and health insurance and asset management businesses helped it post a 23% rise in operating profit in the third quarter.
Allianz rival AXA SA, Europe's second biggest insurer, on Oct 29 posted slightly weaker-than-expected quarterly sales,but said the outlook for its business had improved.
"Allianz more than fulfilled the forecasts, both bottom line and at the operating level," said UniCredit analyst Andreas Weese in a client note.
"While property-casualty insurance was largely in line with expectations,life and health insurance and financial services exceeded the forecasts," Weese said.
Allianz's shares were trading up 3.8%at 82.35 a share early yesterday, outpacing a 1.86% gain in the DJ Stoxx European insurance index.
The company's main business of property and casualty insurance posted an 18% decline in operating profit from the year-earlier quarter.
"While pricing is on an upward trend,our volumes remain challenged due to weaker demand, the effects of our portfolio cleaning measures and selective underwriting," Allianz said of the segment, which normally accounts for some 60% of group operating profit but in the third quarter contributed little more than half.
Allianz reported quarterly operating profit of 1.929 billion ($2.9 billion), above the average forecast of 1.804 billion in a Reuters poll of 18 analysts.
It also swung to a quarterly net profit of 1.3 billion, above the 1.2 billion expected in the poll, from a 2 billion loss in the third quarter of 2008, when it sold its unprofitable Dresdner Bank unit to Commerzbank.
Allianz's shares have risen by 5.8%since the start of the year, lagging a gain of nearly 10% in the DJ Stoxx European insurance index.
Data from Thomson Reuters StarMine,which weights analysts' forecasts according to their track record, Allianz trades at 7.7 times 12-month forward earnings, making it cheaper than French rival AXA, which trades at a multiple of 8.4.
Saturday, October 31, 2009
AIG sells Taiwan unit for $2.15bn
American International Group struck a deal to sell its Taiwan life insurance for $2.15 billion,marking its largest disposal of a division since a government bailout last year saved it from collapse.
Primus Financial, a new firm founded by Citigroup's former Asia investment banking head, together with a Hong Kong partner, agreed to buy Nan Shan Life,ending a five-month auction that saw big interest from many corporates and private equity bidders.
"The deal priced Nan Shan at about one time price to book, which is fair when you compare 1.9 times for Cathay Financial and Fubon Financial, and one time for smaller rival Shin Kong Financial," said Dexter Hsu, an analyst at JP Morgan in Taiwan yesterday.
With the Nan Shan agreement sealed,AIG is now likely to raise cash from two other major assets in Asia.
Hong Kong-based life insurer AIA is seeking a more-than $2 billion initial public offering while American Life Insurance Co, which generates half its revenue in Japan, is seeking a reported $5 billion in an IPO.
Both companies have also attracted acquisition interest, though nothing yet has materialised.
The sale of Nan Shan, in an auction run by Morgan Stanley, allows AIG to check one business off its list of units to sell, after the United States injected $80 billion in taxpayer money into the firm after it nearly collapsed late last year.
Primus, run by former Citi executive Robert Morse, and Hong Kong investment group China Strategic Holdings would pay $2.15 billion for AIG's 97.5%stake in Nan Shan, AIG said yesterday.
Earlier this year, Primus co-chief executive Wing-fai Ng said in an interview with Reuters that Primus planned to use Nan Shan, Taiwan's No.3 life insurer,as a base to expand to Hong Kong, Malaysia and Japan.
Nan Shan has assets of $46.4 billion and employs 36,000 sales agents in Taiwan and has a market share of 10%with its four million customers.
Some analysts and bankers involved in the deal said putting a valuation on the AIG's Taiwan life insurance unit was difficult.
"The pricing is tricky. If you just look at the book value of Nan Shan, then the acquisition price is at a 30% discount,"said Pandora Lee, an analyst with UBS.
First Commercial Bank and Taiwan Cooperative Commercial Bank in Taiwan are arranging a NT$20 billion (around US$588 million) loan for Primus to back its purchase of Nan Shan, according to Thomson Reuters LPC.
FCB and Taiwan Cooperative are expected to each prefund NT$10 billion (around US$294 million) of the loan before Primus settling the Nan Shan transaction.
The agreement marks the end of an auction that spanned several months and involved multiple bidders, including private equity firms, such as the Carlyle Group. Primus had been competing in the end with Chinatrust Financial.
Primus Financial, a new firm founded by Citigroup's former Asia investment banking head, together with a Hong Kong partner, agreed to buy Nan Shan Life,ending a five-month auction that saw big interest from many corporates and private equity bidders.
"The deal priced Nan Shan at about one time price to book, which is fair when you compare 1.9 times for Cathay Financial and Fubon Financial, and one time for smaller rival Shin Kong Financial," said Dexter Hsu, an analyst at JP Morgan in Taiwan yesterday.
With the Nan Shan agreement sealed,AIG is now likely to raise cash from two other major assets in Asia.
Hong Kong-based life insurer AIA is seeking a more-than $2 billion initial public offering while American Life Insurance Co, which generates half its revenue in Japan, is seeking a reported $5 billion in an IPO.
Both companies have also attracted acquisition interest, though nothing yet has materialised.
The sale of Nan Shan, in an auction run by Morgan Stanley, allows AIG to check one business off its list of units to sell, after the United States injected $80 billion in taxpayer money into the firm after it nearly collapsed late last year.
Primus, run by former Citi executive Robert Morse, and Hong Kong investment group China Strategic Holdings would pay $2.15 billion for AIG's 97.5%stake in Nan Shan, AIG said yesterday.
Earlier this year, Primus co-chief executive Wing-fai Ng said in an interview with Reuters that Primus planned to use Nan Shan, Taiwan's No.3 life insurer,as a base to expand to Hong Kong, Malaysia and Japan.
Nan Shan has assets of $46.4 billion and employs 36,000 sales agents in Taiwan and has a market share of 10%with its four million customers.
Some analysts and bankers involved in the deal said putting a valuation on the AIG's Taiwan life insurance unit was difficult.
"The pricing is tricky. If you just look at the book value of Nan Shan, then the acquisition price is at a 30% discount,"said Pandora Lee, an analyst with UBS.
First Commercial Bank and Taiwan Cooperative Commercial Bank in Taiwan are arranging a NT$20 billion (around US$588 million) loan for Primus to back its purchase of Nan Shan, according to Thomson Reuters LPC.
FCB and Taiwan Cooperative are expected to each prefund NT$10 billion (around US$294 million) of the loan before Primus settling the Nan Shan transaction.
The agreement marks the end of an auction that spanned several months and involved multiple bidders, including private equity firms, such as the Carlyle Group. Primus had been competing in the end with Chinatrust Financial.
BAY taps bancassurance
Bank of Ayudhya has set an ambitious growth target for its bancassurance business next year, helped by its "boxed"insurance policies, says senior vicepresident Kris Chantanotoke.
The bank aims to increase first-year premiums by 50% next year, thanks to its low base and the growth potential of business segmentation. For the first eight months of the year, BAY recorded firstyear premiums of 3.5 billion baht. The bank expects to achieve its target of 4 billion this year compared with 3 billion last year.
Business expansion will be supported by its products and services, particularly the bundled or boxed policies. BAY is the first bank in Thailand to offer this convenient and simple product.
For the remainder of the year, the bank expects to sell 200,000 boxes (policies). BAY, the country's fifth-largest bank by total assets, launched three insurance boxes after the bank entered the market three years ago.
Bancassurance in Thailand has grown for more than five years and the market showed significant growth in the past two years because of added players. The market started with some banks around 2004, but now most banks in the country offer the financial product.
Thailand's third-largest bank by total assets, Siam Commercial Bank, ranks number one in bancassurance, followed by Kasikornbank and Bangkok Bank,respectively. The nationwide network of large banks is supporting the rapid growth rate of bancassurance.
Mr Kris forecast that the country's insurance market would grow 13% next year, while the bancassurance business is expected to grow 15%. He said that 95% of insurance sales from the products of its three partners come from its branches, with 3% from telemarketing.
The bank aims to increase first-year premiums by 50% next year, thanks to its low base and the growth potential of business segmentation. For the first eight months of the year, BAY recorded firstyear premiums of 3.5 billion baht. The bank expects to achieve its target of 4 billion this year compared with 3 billion last year.
Business expansion will be supported by its products and services, particularly the bundled or boxed policies. BAY is the first bank in Thailand to offer this convenient and simple product.
For the remainder of the year, the bank expects to sell 200,000 boxes (policies). BAY, the country's fifth-largest bank by total assets, launched three insurance boxes after the bank entered the market three years ago.
Bancassurance in Thailand has grown for more than five years and the market showed significant growth in the past two years because of added players. The market started with some banks around 2004, but now most banks in the country offer the financial product.
Thailand's third-largest bank by total assets, Siam Commercial Bank, ranks number one in bancassurance, followed by Kasikornbank and Bangkok Bank,respectively. The nationwide network of large banks is supporting the rapid growth rate of bancassurance.
Mr Kris forecast that the country's insurance market would grow 13% next year, while the bancassurance business is expected to grow 15%. He said that 95% of insurance sales from the products of its three partners come from its branches, with 3% from telemarketing.
Tuesday, October 20, 2009
Aviva expects windfall from Delta float
British insurer Aviva expects to pocket 1.2 billion ($1.79 billion) for future growth and possible acquisitions when it floats Dutch unit Delta Lloyd in Europe's largest IPO this year.
Aviva said yesterday that Delta Lloyd shares would be offered on Euronext's Amsterdam exchange at between 15.5 and 19 each, valuing the business at 2.6 billion to 3.1 billion.About 42% of Delta's shares will be sold, leaving Aviva as the group's biggest investor with 57%. The balance is held by Dutch charitable trust Fonds NutsOhra.
"This step, which will be the largest IPO in western Europe this year, will free up capital for us to use elsewhere and give us the option of exploring further growth opportunities," Aviva chief executive Andrew Moss said in a statement.
"There are no surprises there, the timing and details were as people were expecting," said MF Global analyst Peter Eliot."From Aviva's point of view, it is probably less than they would have like to have received for it, at less than embedded value, but at the same time it is a loss-making business."
At the upper end of the price range,the shares represent a 24% discount to Delta Lloyd's market-consistent embedded value (MCEV), a measure of insurance companies' worth which includes the present value of future earnings from life policies.
Delta Lloyd calculated its own MCEV at 4.1 billion at the end of June.Reuters reported on Sunday that the IPO would be offered at a discount to MCEV to stimulate investor interest amid a raft of competing share sales.
But under Aviva's more conservative approach, Delta Lloyd had an MCEV of
2.7 billion at the half-year, putting the IPO at a slight premium at the midpoint of the price range.
Aviva said in August that it would consider using the proceeds of the Delta IPO to acquire rivals weakened by the financial crisis.
The company yesterday reiterated that Delta Lloyd's stock market listing could also help it make acquisitions as the Benelux insurance market undergoes a period of consolidation.
Aviva would have to give its approval to any merger or takeover involving Delta Lloyd that took the British insurer's stake below 50%.
Delta Lloyd said yesterday that it made a net loss of ฃ88 million ($143.4 million)in the nine months to Sept 30, while life new business sales for the period fell 12% to ฃ2.8 billion.
Trading in Delta Lloyd shares is expected to begin in Amsterdam on Nov 3, Aviva said.
Aviva said yesterday that Delta Lloyd shares would be offered on Euronext's Amsterdam exchange at between 15.5 and 19 each, valuing the business at 2.6 billion to 3.1 billion.About 42% of Delta's shares will be sold, leaving Aviva as the group's biggest investor with 57%. The balance is held by Dutch charitable trust Fonds NutsOhra.
"This step, which will be the largest IPO in western Europe this year, will free up capital for us to use elsewhere and give us the option of exploring further growth opportunities," Aviva chief executive Andrew Moss said in a statement.
"There are no surprises there, the timing and details were as people were expecting," said MF Global analyst Peter Eliot."From Aviva's point of view, it is probably less than they would have like to have received for it, at less than embedded value, but at the same time it is a loss-making business."
At the upper end of the price range,the shares represent a 24% discount to Delta Lloyd's market-consistent embedded value (MCEV), a measure of insurance companies' worth which includes the present value of future earnings from life policies.
Delta Lloyd calculated its own MCEV at 4.1 billion at the end of June.Reuters reported on Sunday that the IPO would be offered at a discount to MCEV to stimulate investor interest amid a raft of competing share sales.
But under Aviva's more conservative approach, Delta Lloyd had an MCEV of
2.7 billion at the half-year, putting the IPO at a slight premium at the midpoint of the price range.
Aviva said in August that it would consider using the proceeds of the Delta IPO to acquire rivals weakened by the financial crisis.
The company yesterday reiterated that Delta Lloyd's stock market listing could also help it make acquisitions as the Benelux insurance market undergoes a period of consolidation.
Aviva would have to give its approval to any merger or takeover involving Delta Lloyd that took the British insurer's stake below 50%.
Delta Lloyd said yesterday that it made a net loss of ฃ88 million ($143.4 million)in the nine months to Sept 30, while life new business sales for the period fell 12% to ฃ2.8 billion.
Trading in Delta Lloyd shares is expected to begin in Amsterdam on Nov 3, Aviva said.
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