Aviva Hong Kong will retain 40%, with Tencent purchasing 20% and Hillhouse 40% for an undisclosed sum.
The resulting joint venture, subject to regulatory approval, will focus on selling basic life insurance and investment products online in the territory, said Aviva in a statement.
The move comes as Aviva attempts to increase its operating profits in “mid-single digits” over the medium term.
Asia, which accounts for 7% of the group’s earnings, has been described as one of its “acorn” markets offering fast growth.
Hong Kong’s life insurance industry is currently dominated by companies such as Prudential and AIA, which sell mainly through agents.
Last August, Prudential said that its Asian business, which includes offices in Hong Kong and Singapore, contributed a third of the life insurer’s Q3 operating profit, with sales in regular premium products up 20%.
According to the FT, less than 1% of Hong Kong life insurance sales are made digitally, so Aviva’s entrance into the market may mean it is hoping to bypass the use of agents and their commissions, which can be high.
The publication noted that some charge up to 160% of the annual premium over the first five years of a 20-year policy.
In December 2014, Aviva bought Friends Provident International, which has operations across Asia and the Middle East.
FPI’s strong performance last year saw Aviva’s operating profit in Asia rise nearly 50% for the first six months of 2016 driven in part by strong sales of protection products and retail health schemes in Singapore.
Aviva’s Hong Kong business used to distribute its products via branches of DBS, a bank, but that agreement ended in 2015.
The sale comes just days after the insurer announced it is streamlining its UK operations and putting one person in charge of its main international businesses, chief executive Maurice Tulloch.