UPDATE 1-Aviva puts Malaysian business on block - sources

* Has operations in 10 Asian countries

* Also selling Taiwan assets

By Denny Thomas and Clare Baldwin

HONG KONG, May 9 (Reuters) - Aviva has put its Malaysian operations on the block and is close to hiring a bank to help with the sale process, sources said on Wednesday, as the British insurer moves ahead with a plan to exit non-core markets.

The deal, which is in its early stages, could fetch about $200 million and comes at the same time that Dutch financial company is exiting its Asian insurance and investment management operations.

Aviva would not comment. The sources declined to be identified as the process is confidential.

One source said the sale process has not been launched and the recent shake-up in the company's top ranks -- chief executive Andrew Moss stepped down on Tuesday after a shareholder revolt over pay -- could slow the sale.

Rapid economic growth and the rise of the middle class in Asia is driving demand for insurance products in the region. Companies with sub-scale operations are finding it hard to gain market share and improve profitability.

Aviva is also in the process of exiting its loss-making Taiwan operations, a process that has been long delayed. .

It has operations in 10 Asian countries, mostly joint ventures, and Asia Pacific operations made up 2 percent of 2011 group operating profit.

Aviva entered Malaysia in June 2007 in a joint venture with CIMB Group, paying 500 million ringgit ($164 million) for a 49 percent stake, according to CIMB's website. CIMB is Malaysia's second-largest lender by assets.

The joint venture's net profit fell marginally to 31.8 million ringgit last year, while net premiums it underwrote dropped about 30 percent to 230 million.

The Malaysian life insurance market is forecast to grow 5.3 percent this year and 5.5 percent in 2013, according to Swiss Re. The strong economic growth has attracted global financial institutions and sources said the Aviva auction could attract interest from AIA Group, Sun Life Financial and Manulife Financial Corp.