PETALING JAYA: Following the government’s decision to pare down foreign insurance players’ ownership in their Malaysian businesses, AXA SA and Affin Bank Bhd are reportedly mulling the sale of their general and life insurance businesses in Malaysia.
Quoting sources, Bloomberg reported that the parties are looking to sell AXA Affin General Insurance Bhd for US$500mil and AXA Affin Life Insurance Bhd for US$150mil.Both financial institutions are in the midst of engaging with advisers for the transaction.
Given that the developing deal is at a preliminary stage, it is likely that AXA and Affin could maintain their holdings in the general and life insurance businesses.
AXA Affin General Insurance is 49.99% owned by AXA, with the remaining being owned by Affin.
On the other hand, Affin is the majority shareholder of AXA Affin Life Insurance with a 51% equity.
Bloomberg reported that AXA declined to comment on the matter, while Affin did not respond to requests for comment.
Prudential, Tokio Marine and Zurich Insurance have been looking to reduce stakes in their local units, in line with the minimum 30% Malaysian ownership requirement.
Apart from that, a number of foreign insurers are considering contributing to “mySalam”, a healthcare scheme for the bottom 40% (B40) of Malaysian households.
An exemption was granted to Great Eastern Life after the insurance giant pledged a minimum RM2bil contribution to “mySalam”.
According to Bank Negara, all foreign insurers have submitted their proposals to meet the 30% local ownership requirement within the April 2019 deadline.
Inversely, Tokio Marine Asia Pte Ltd commenced due diligence on RHB Bank Bhd’s insurance unit, RHB Insurance, just last week.
The disposal of RHB Insurance is expected to be concluded by the end of the first quarter of next year. In July, RHB had obtained Bank Negara’s approval to commence negotiations with Tokio Marine for the proposed disposal of up to 94.7% of RHB Insurance.
According to AXA Affin General Insurance’s annual report 2018, it posted a net income of RM100mil and RM1.44bil in gross earned premiums in 2018.
Meanwhile, AXA Affin Life Insurance registered a lower loss of RM8.1mil in 2018, as compared to a loss of RM17.7mil in the previous year.
AXA Affin Life Insurance achieved gross premiums of RM463.4mil in 2018.
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