According to Reuters, the FTSE 100 insurer is working with advisers to sell its 50% cent stake in Old Mutual-Guodian Life Insurance, ending the duo’s 13-year partnership.
It is understood one or more local firms are likely to buy the stake. The deal is yet to be agreed and Old Mutual could pull the plug on the Chinese sale if bids fail to meet its expectations, added Reuters.
When contacted by International Adviser, Old Mutual declined to comment on the reports.
Restrictive ownership limits, capped at 50% for foreign life insurers, and tough local competition from state-backed domestic firms have made it harder for joint ventures such as Old Mutual’s to succeed in China.
The move is part of the Old Mutual’s ongoing restructuring, a source told the news agency, after the insurance giant revealed last year it will separate its four businesses into standalone entities.
The four units include South African bank Nedbank, UK wealth manager Old Mutual Wealth, OM Asset Management and Old Mutual Emerging Markets.
Last week, fellow London-listed insurer Standard Life announced the sale of half its Hong Kong business as it prepares to move away from traditional life insurance during its mammoth £11bn ($13.7bn, €12.8bn) merger with Aberdeen Asset Management.
Both deals come at a critical time for the international life insurance sector as it struggles with low returns, falling profitably and declining sales of lucrative unit-linked insurance products
Old Mutual is looking to exit its emerging markets operations either in a spin-off or by selling such divisions in favour of concentrating on sub-Saharan Africa.
Last month, China’s HNA snapped up a 25% share in Old Mutual Asset Management for $446m. The firm also sold its Italian wealth management arm last year for $297m.
London-headquartered insurance firm, Aviva recently put its international life unit, Friends Provident International (FPI), up for sale with the newly-rebranded Utmost Wealth Solutions as the frontrunner to buy the Middle East and Asia-focused business, according to a source close to International Adviser.
Aviva plans to focus on the domestic insurance market in Singapore having set up a 420-strong team of financial advisers in the city-state since last summer.
Meanwhile, another UK insurer Prudential may be looking to expand east after its most recent financial results revealed that new business sales of life products rose by 19% to £6.3bn ($7.7bn, €7.2bn) due to strong growth in Asia.