‘Nothing on the table’ for AmGeneral Insurance sale

  • Banking
  • Saturday, 28 Jul 2018

AmBank Group chief executive officer Datuk Sulaiman Mohd Tahir said:

AmBank chief comments on company’s plan to hive off the asset

Market talk of AMMB Holdings Bhd’s (AmBank) plan to sell off its general insurance business, AmGeneral Insurance Bhd, has been gaining traction in recent weeks with some foreign and even local insurance companies said to be potential suitors.

However AmBank group chief executive officer Datuk Sulaiman Mohd Tahir says at the moment, “nothing is on the table.”

“As part of the journey to meet our Top 4 strategy, we are reviewing all aspects of our business to ensure we remain focused and more importantly to enhance performance.

“But at the moment we have nothing on the table regarding this matter,” he tells StarBizweek.

AmBank owns 51% of AmGeneral, while the remaining 49% stake is held by Insurance Australia Group Ltd (IAG), which is Australia’s biggest general insurer.

The company operates under its two brands – AmAssurance and Kurnia.

News that AmBank is weighing a sale of AmGeneral that could fetch a value between US$400mil-US$500mil (RM2bil) following a route to exit non-core businesses, was first reported by Reuters late last year.

More recently in April this year, the news agency reported that IAG was set to sell its four Southeast Asian businesses as part of a review of its Asian operations,

Besides Malaysia, IAG has businesses in Thailand, Vietnam and Indonesia in Southeast Asia and also operates in India and China.

According to the newswire, its Malaysian entity could be attractive to firms including Maybank insurance arm Etiqa, Japanese insurer Tokio Marine and Chinese insurer Fosun.

However, according to a source familiar with Etiqa, the Maybank unit which is looking at a potential listing, could be more interested in another insurance outfit, namely Allianz Malaysia as “its books were more attractive.”

To be sure, AmBank will have to get regulator Bank Negara’s nod for formal talks with any suitor.

“General insurance is a good business for us because it contributed significantly to earnings and we are number one in the market.

Top motor insurer

According to AmBank’s 2017 annual report. AmGeneral is currently the number one motor insurer in the country with a market share of 15.76%.

Pressed to elaborate, Sulaiman says: “There are always interested parties but it is always a question of what suits us and what suits the other party.

He adds that the insurance industry is a very regulated business and everything has to go through a due process.

He also remains coy when asked whether there are other non-core businesses of AmBank that could be monetised in the near future.

“We are a dynamic entity and we are ready and always reviewing prospects. But at this juncture, there are no concrete plans,” he says. Industry players have said that AmBank could be targeting to offload some of its non-core businesses to focus on its core banking operations.

The banking group’s commercial bank is AmBank (M) Bhd, while its other subsidiaries are AmInvestment Bank Bhd and AmBank Islamic Bhd.

These entities are seen as the cornerstones of the lender.

AmBank also has a life insurance and takaful business under AmMetLife, which is a strategic partnership with MetLife International Holdings.

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