Aviva acquisition inSri Lanka

Aviva PLC
01 February 2006




News release



1 February 2006


        AVIVA ANNOUNCES ACQUISITION AND BANCASSURANCE DEAL IN SRI LANKA


Aviva plc ('Aviva') announces the acquisition of a 51% stake in Eagle Insurance
Limited ('Eagle'), the third largest insurer in Sri Lanka. In addition, Eagle
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 has 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.  Aviva and NDB will be the principal shareholders of Eagle.


Eagle is a composite insurer, with life, general insurance and asset management
operations and a 20% 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. The life business accounts for 70% of Eagle's premium income, derived
predominantly via direct sales. The general insurance business accounts for 30%
of premium income, and is in line with Aviva's strategy of focusing on personal
and SME commercial lines business.


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, Aviva International, said: '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.'


                                    - ends -



Enquiries:


Media
Hayley Stimpson, director of external affairs           [phone]
Sue Winston, head of group media relations              [phone]


Analysts

Charles Barrows, investor relations director            [phone]
Nicole Marques, investor relations manager             [phone]



Notes to editors:

•         This transaction was made at an exchange rate of LKR180.60 = £1.00



•         Aviva is the world's sixth-largest insurance group based on gross
world-wide premiums and market capitalisation (at 31 December 2004); it is one
of the leading providers of life and pensions in Europe and has substantial
businesses in other markets around the world.



•         Aviva's main activities are long-term savings, fund management and
general insurance, with world-wide total income of £40 billion and assets under
management of £280 billion at 31 December 2004.



•         The Aviva media centre at www.aviva.com/media includes images, company
and product information and a news release archive.




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