Memorandum submitted by Aviva
BACKGROUND TO
AVIVA
1. Aviva is the world's fifth largest insurance
group and is the leading provider of life and pensions to Europe
with substantial positions in other markets around the world.
In the UK, we sell our products through the Norwich Union brand.
2. Aviva's principal business activities
are long-term savings, fund management and general insurance,
with worldwide total sales of £41.5 billion and assets under
management of £364 billion at 31 December 2006.
3. As highlighted in our submission to the
initial inquiry, Aviva's presence in India has two components:
A self-sustaining, high-quality, low-cost operation in Asia providing
operational support to the Aviva group, called Aviva Global Services;
A joint venture in an Indian Life Insurance company, trading under
the Aviva name.
4. As we move through 2007, our operations
in India and Sri Lanka are a key component of Aviva's business
model. Aviva Global Services has a presence in India across Delhi,
Pune, Bangalore, Chennai and Colombo in Sri Lanka. It will employ
a total of about 7,800 people by 2008.
5. In addition to the work we do on operational
processes in India and Sri Lanka, we also outsource some of our
IT capability to two Indian companies, Wipro and TCS, who carry
out this work in both the UK and India. This capability is the
equivalent of about 2,000 people.
FOREIGN DIRECT
INVESTMENT
7. In June 2006, the Committee (paragraph
90) called on the Government to urge the Indian Government to
completely open up its financial services market to foreign direct
investment. We continue to support the Committee's recommendation.
8. As highlighted in paragraph 3, Aviva
plc has a 26% stake, the maximum permitted under current Indian
law, in an Indian life insurance joint venture with one of India's
oldest and largest groups of companies, Dabur. We are keen to
increase the investment in the joint venture.
9. In January this year, the Indian Finance
Minister P Chidambaram indicated to the Chancellor that the Indian
Government would soon extend the foreign direct investment limit
to 49%. However, news coverage has since suggested that the initiative
remains a topic of discord within the governing coalition. As
a result the Bill has yet to be introduced to the Indian Parliament.
10. We ask the Committee to again call on
the Government to urge the Indian Government to allow greater
foreign direct investment in India's financial services market.
22 May 2007
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